Domino’s Pizza expands with acquisition of PizzaVest in Taiwan for $79m

By buying a Taiwanese pizza chain, Australian fast food giant Domino’s has added some unusual toppings to its global spread.

Bubble tea pizza is one of the toppings on the menu of Domino’s in Taiwan.

Pizzas popular in Asia have some unusual toppings, as Australia’s Domino’s will find after buying Taiwan’s second largest pizza chain.

To Australian tastes at least, bubble tea pizza may be one of the strangest on the menus of Domino’s in Taiwan, currently owned by PizzaVest but soon to become part of the Australian company’s growing international fast-food empire.

Or how about toppings such as lobster honey sauce pig double, golden lobster beef, peach-smoked chicken or okonomiyaki pizza, based on a Japanese savoury pancake.

Now while there are no currently no plans to add these delicacies to local menus, they could one day compete with classics like Hawaiian or capriccioca for the tastebuds of a growing cohort of Asian-food loving Australians.

By upping its bet on Asia with a deal worth $79m, Australia’s Domino’s Pizza Enterprises will eat up PizzaVest’s 157 corporate franchised stores in Taiwan, with room for more.

It extends Domino’s reach in the region, with the ASX-listed company also owning Domino’s in Japan, as well as pizza chains through New Zealand, France, Germany and the Benelux countries.

This topping is listed on Taiwanese menus as "Lobster Honey Sauce Pig Double Enjoy".

The Taiwan market is very different to what Aussies are used to, and the Taiwan Domino’s made headlines in 2019 when it launched its bubble tea-topped pizza.

Bubble tea is a popular flavoured milk tea drink in Asia served with different types of chewy tapioca balls, called bova. The Taiwanese Domino’s adapted the bubble tea concept with pizzas served with honey and cheese toppings.

The Australian owners of Domino’s Pizza may yet find they have struck gold with the bubble tea topping, because the Asian delicacy is increasingly popular among younger Australians.

Only this week The Australian reported how two Melbourne friends stood down from their jobs during the Covid-19 pandemic broke records with a crowd-funding campaign for their DIY bubble tea business.

The Bubble Tea Club broke Australia’s record for the highest number of expressions of interest for crowd-fundings, notching nearly 3000 pledged investors ahead its launch on the Birchal platform.

The Domino’s deal to buy 157 corporate and franchised stores in Taiwan has long-term potential.

It said it could expand to 400-plus stores and it expects a lift in its earnings by applying technology and operating expertise and making regional savings.

As a result of the Taiwan acquisition, Domino’s is revising its future store count outlook in Asia from 1500 stores to 1900 stores by 2030-2032.

Domino’s said the acquisition would deliver low single digit EPS accretion on a FY2020 pro-forma basis (excluding integration, reorganisation and transaction costs).

Taiwan has a population of more than 23.5 million and adding Domino’s Taiwan to Domino’s portfolio will expand the Asian market by more than 18 per cent, to almost 150 million people, the company said.

How about “Golden Lobster Beef”?

Domino’s Pizza Enterprises CEO and managing director Don Meij said the company believed there was significant potential to open more stores, closer to customers, throughout the market.

“This is a market with tremendous opportunity for our business and this acquisition provides similar opportunity for the local team,” Mr Meij said.

“We have built centres of excellence in Australia and New Zealand, Europe and Asia, allowing us to complement local expertise in menu development and taste preferences with proven experience in technology, marketing, operations, and strategy and insights.

“Just as this approach has worked in Europe and more recently in Japan, we intend to apply the same lessons in the new market.”

The $79m purchase is to be funded from cash and debt facilities and is expected to be closed in the first half of fiscal 2022.

Originally published as Domino’s Pizza expands with acquisition of PizzaVest in Taiwan for $79m