Restaurant operator Devyani International Ltd. has announced its foray into the Thailand market by acquiring 274 KFC outlets and has also approved investment of Rs 340 crore in its global arm.
Subsidiary Devyani International DMCC, Dubai, will acquire controlling stake in Restaurants Development Co., which operates 274 KFC stores across Thailand for Rs 1,066.10 crore, the company said in an exchange filing on Monday.
Of the total amount, Devyani will shell out Rs 341.4 crore, while its partner Temasek Holdings (Camas) will provide Rs 328 crore and a local Thai partner will contribute Rs 11.90 crore. The remaining Rs 384.8 crore will be funded through debt.
The deal is expected to close before March 31, 2024, and is subject to customary regulatory and other approvals, the company said.
"This acquisition will position DIL as a key player in the exciting QSR/LSR market in Thailand and the region and will pave the way for additional growth and expansion," a statement said.
Devyani is also planning to double the existing KFC store count in the next 10 years in Thailand, its investor presentation said.
As part of its "multi-pronged growth strategy" in Thailand, the company will pivot towards online/mobile ordering for KFC to drive new locations and asset type. It will increase focus on 'Drive Through' and 'Gas Station' to drive superior unit economics, it said.
"Thailand is a strong poultry market in its basket of meat consumption and we believe there is an opportunity available for the market to grow even further," the company said.
Devyani will also invest Rs 340 crore in its global holding unit, along with Camas, which will deploy Rs 330 crore. After the investment, the parent firm and Camas will hold 51% and 49% stake, respectively, in Devyani International DMCC. These funds shall be utilised to part-finance the Thailand acquisition, the statement said.
Shares of Devyani International closed 0.76% lower at Rs 183.30 apiece on Monday, ahead of the announcement, as compared with a 0.24% decline in the benchmark BSE Sensex.
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