McDonald's, Domino's seek equity toppings
After Cafe Coffee Day and Nirula’s, it is now the turn of Yum! Restaurants, and Yo! China who are looking for private equity (PE) investors.
By TNN |
NEW DELHI: After Cafe Coffee Day and Nirula’s, it is now the turn of Yum! Restaurants, and Yo! China who are looking for private equity (PE) investors.
It is learnt that even Hard Castle - the franchisee for the western and southern regions of McDonald’s, and Domino’s in India - is keen on a private equity placement. Sources in the industry say that while both Pizza Hut and McDonald’s are looking at raising Rs 150-200 crore for their expansion, Yo! China is looking at raising Rs 50 crore through the PE route.
Companies however appear tight-lipped about their plans. When contacted, Arvind Mehdiretta, marketing manager, Pizza Hut, told ET, “We can’t comment on this now.” Ashish Kapur, MD, Yo! China, said: “We would be open to private equity. It’s a good investment opportunity for PE players also as in this business, you own the end customer and it’s a high-brand business.”
It is learnt that both those chains are in expansion mode and require funding to finance this expansion. Yo! China, which currently has 20 outlets in 11 cities, is planning to add 30 more outlets over the next few months. While the buzz is that Domino’s India, the master franchisee, is either looking for a private equity infusion or raising funds through the IPO route, this was denied by company chairman Shyam Bhartia.
Earlier this year, Chinese fast food chain Mark Pi had got PE placement from Deepak Shahdadpuri-promoted VC fund, Gem India Advisors, which acquired 26% stake in the chain.
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Some of the major equity deals include the $40m investment made by Sequoia Capital and the $15m investment made by IFC in the coffee chain-Cafe Coffee Day. While Goldman Sachs picked stake in Cremica for $15m, Future Capital bought stake in Capital Foods for an undisclosed amount.Gaurie Mishra & Chaitali Chakravarty
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