Bain Capital is to build on its Domino’s Pizza portfolio with the acquisition of its Japanese master franchisee. The firm has agreed to acquire Higa Industries from Daiwa SMBC Capital, the private equity arm of Japanese investment bank Daiwa Securities SMBC, along with other shareholders Duskin Company and founder and CEO Ernest M Higa.
Domino’s was the first pizza delivery chain to establish a base in Japan, first launching 25 years ago under an exclusive master franchise agreement with Higa Industries. Higa currently operates 179 franchised Domino’s Pizza branches in the country.
David Gross-Loh, managing director of Bain’s Tokyo division, said that the chain’s performance in Japan belied a difficult market for restaurants in Japan in recent years.
“The strength of this position is evident when you consider that despite a tough environment for the restaurant industry, the company has achieved steady growth in both sales and profit in Japan over the last three years,” said Gross-Loh.
Bain acquired a majority stake in Domino’s Pizza in a private transaction, and has retained a significant minority stake since the company went public in 2004.
The firm opened its Tokyo office in 2006, and currently has a team of 20 investment and operations professionals in the country. Japanese investments so far have included BELLSYSTEM 24, MEI Conlux, Sun Telephone, D&M Holdings, and Toys “R” Us.
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Bain acquires Japan Domino’s Pizza master franchisee