The acquisition will increase Domino’s store counts in Germany to 300-340.
Domino’s Pizza Enterprises Limited has announced that its majority-owned German joint venture has entered into a binding agreement to acquire the “Hallo Pizza” chain of 170 stores in Germany for €32 million on a cash and debt-free basis.
Hallo Pizza is the largest independent pizza chain in Germany with a comprehensive national footprint of 170 stores throughout Germany. The business also includes a wholly owned procurement and logistics business, Chrisa, which operates 3 commissaries across Germany.
Hallo Pizza generated network sales of €80.2 million and normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of €3.5 million for FY16.
The acquisition will strengthen Domino’s Pizza Deutschland’s position and increase the Domino’s store count in Germany from 209 to approximately 300 – 340 following brand conversions. Existing Hallo Pizza stores will be operated on a transitional basis until franchise contracts are converted to Domino’s.
The transaction is also expected to improve the profitability of former Hallo Pizza stores and existing Domino’s stores for both franchisor and franchisees as stores are converted to Domino’s and national advertising campaigns, social media initiatives and IT innovations are leveraged over the larger store network.
Domino’s Pizza Enterprises’ managing director and group CEO Don Meij said, “The acquisition of Hallo Pizza strengthens our leading market position and assists DPE to accelerate towards achieving its target of operating 1,000 stores in Germany. We are excited to share our innovations with Hallo Pizza franchisees to drive the customer experience and higher sales under the Domino’s system.”
The transaction is scheduled to complete in early calendar 2018. Following completion, Domino’s will work with the vendor and Hallo Pizza management to convert franchise contracts to the Domino’s brand over the next 24 – 36 months.
Hallo Pizza’s owner Axel Fassbach said, “I am delighted that Hallo Pizza franchisees will be joining Domino’s, the leading pizza operator in Germany and share in Domino’s operational expertise, leading innovation, and brand presence to provide even greater products and experience to our customers. We will work with Domino’s management to ensure a seamless transition for our franchisees.”
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