27/05/2021 - 15:00

Dragontail Systems receives $93.5m takeover bid

27/05/2021 - 15:00

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The owner of Pizza Hut and KFC has proposed to acquire ASX-listed hospitality software company Dragontail Systems.

Dragontail Systems receives $93.5m takeover bid
Yum! Brands, which owns Pizza Hut, has offered to pay $93.5 million to acquire Dragontail Systems.

The owner of Pizza Hut and KFC has proposed to acquire ASX-listed hospitality software company Dragontail Systems.

On Thursday, Dragontail said it had entered into a scheme implementation deed with the Australian arm of Yum! Connect, which has proposed to acquire all the shares in Dragontail for a total consideration of $93.5 million.

Dragontail shareholders will be entitled to receive 23.5 cents for every share held in the company.

The board has unanimously recommended all Dragontail shareholders vote in favour of the scheme, subject to an independent expert declaring the offer fair to shareholders.

Managing director Ido Levanon said Dragontail and Yum! Brands had collaborated for years.

“Dragontail’s board of directors fully supports this transaction, which it considers to be an attractive opportunity for its shareholders,” he said.

“It will also provide Yum! Brands with innovative technology.”

Dragontail’s core technologies are its Algo Platform and QT AI camera system.

Together, they monitor and manage the food preparation process for customer orders by prioritising tasks for staff, with the aim of increasing efficiency and reducing the likelihood of errors.

“The activities of Dragontail and Yum! Brands are complementary, the synergy is natural and we bless the completion of this acquisition,” Mr Levanon said.

Yum! Brands chief financial officer Chris Turner said, through the deal, the company would accelerate and enhance its delivery technology capabilities and optimise the end-to-end food preparation process.

Based in Lousiville, Kentucky, Yum! Brands has more than 50,000 restaurants in more than 150 countries and territories.

It also owns retail chain Taco Bell, which is set to open restaurants in Ellenbrook and Midland.

The scheme implementation deed is subject to court approval among other conditions.

Thomson Geer is acting as lead adviser to Dragontail.

The company was founded in Israel in 2003 and listed on the ASX in 2016. Its home branch is in Perth and registered office in Melbourne.

Shares in Dragontail closed up 24 per cent on Thursday’s news to trade at 23 cents – its highest share price since November 2018.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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