Domino’s Pizza has agreed to pay $42 million to Bain Capital to gain 100% control of its Japan fast food business.
The company says it now has a binding agreement after receiving a put option exercise notice from Bain Capital in May this year.
The purchase price for the 25% of the Japan joint venture will be about $42 million, slightly below the $46.4 million recorded in Domino’s financial accounts.
Morgan Stanley analysts say Bain’s 25% ownership equates to $10 million in after tax net profit, based on a 2018 Japan earnings forecast of $57 million.
Domino’s has about 493 stores in Japan with earnings growing by 17% in 2017.
The purchase price will be funded out of existing cash reserves and debt facilities.
Flagstaff Partners acted as financial adviser to Domino’s Pizza Enterprises Limited and Thomson Geer acted as legal adviser.