12 March
2024
LEI: 213800Q6ZKHAOV48JL75
This
announcement contains Inside Information
Domino's Pizza Group
Plc
Acquiring full control of
Shorecal to meaningfully accelerate growth in
Ireland
Domino's Pizza Group plc ("DPG" or the "Company") is pleased to
announce that it has signed a binding sale and purchase agreement
to acquire the remaining 85% shareholding it does not already own
in Shorecal Limited, the largest Domino's franchise business
operating in the Republic of Ireland and Northern Ireland
("Shorecal"), from Charles Caldwell, Adrian & Anne Caldwell
(collectively, the "Caldwells"), and SC Holdings I Ltd, an
investment vehicle controlled by Radcliff Management in partnership
with the Bronfman Family Office LLC, (the "Sellers"), for a total
consideration of €72m (approximately £62m) (the "Consideration"),
subject to completion adjustments. DPG will also repay the
outstanding debt on completion, currently €19.9m (approximately
£17.3m) (the "Transaction").
Shorecal is a leading Domino's
franchisee on the island of Ireland, operating 34 of the 99
Domino's stores across the Republic of Ireland and Northern
Ireland.
Following DPG's recently announced
growth framework, the Company has been working at pace to execute
against its intention to review its corporate store estate and
joint ventures. Against this backdrop, and DPG's recent investment
in its Irish supply chain centre, the Transaction provides a unique
opportunity for DPG to accelerate Shorecal's growth, materially
increase the store count, and leverage the capacity in the new
supply chain centre, continuing to provide great tasting products
and service to our customers. Shorecal's existing management will
remain in role to accelerate the growth, supported by the
experienced, and recently expanded, DPG team.
At completion, 61% of the
Consideration will be payable to the Sellers in cash, with the
remaining 39% to be satisfied by an issuance of shares in the
Company (the "Consideration Shares") to the Sellers. The number of
Consideration Shares to be issued will be based on the VWAP of the
Company's shares for the trailing 3-month period. A subsidiary of
the Company already owns a 15% shareholding in Shorecal, and
therefore, the Transaction will result in DPG acquiring a 100%
shareholding in Shorecal. The Transaction is at an attractive
multiple of 8x EBITDA and is expected to be earnings accretive in
the first full year of ownership and significantly accretive in the
long-term.
The Transaction is subject to
competition approval in the Republic of Ireland and is expected to
complete by 31 May 2024.
As noted in the Shorecal's 2022
Annual Report, the book value of Shorecal's gross assets as at 25
December 2022 were €54.3m, with Shorecal recognising a profit
before tax of €8.7m in FY 2023.
Andrew Rennie, DPG Chief Executive
Officer, said:
"I'm delighted that we have been able to move quickly on the
first part of the growth plan we set out in December and agree
terms to acquire the remaining shares in Shorecal. We believe
there is a significant opportunity for us in Ireland and we are now
in an even stronger position to accelerate our growth, open new
stores, and provide great service and great tasting products to our
customers."
"I
would like to personally thank Charles and Adrian Caldwell for all
they have done to build the Domino's brand in the Republic of
Ireland and Northern Ireland."
"Our asset-light and highly cash generative operating model
enables us to invest to drive growth, both in our core UK &
Ireland business and also in additional growth
opportunities. We are committed to an
asset-light business model and our strategy will centre on
acquiring, strengthening and then ultimately redistributing stores
in the estate. A core part of our capital
allocation framework is the efficient deployment of capital and we
are actively assessing our corporate store estate and joint
ventures at pace to drive shareholder value."
Charles Caldwell of Shorecal said:
"Adrian and I are proud to have grown Shorecal over the years
to create a strong business, delivering great products to customers
across Ireland. We are delighted that DPG and the Shorecal team led
by George Bertram, CEO, will take the business forward and continue
delivering outstanding service to our customers."
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 and was authorised for release by Adrian Bushnell,
Company Secretary.
For
further information, please contact:
Domino's Pizza Group plc:
Will MacLaren, Head of Investor
Relations
07443 192 118
Brunswick:
Tim Danaher, Abbie Sampson
020 7404 5959
About Domino's Pizza Group
Domino's Pizza Group plc is the UK's
leading pizza brand and a major player in the Irish market. We hold
the master franchise agreement to own, operate and franchise
Domino's stores in the UK and the Republic of Ireland.