Melbourne-based fast food software vendor Dragontail Systems is set to be gobbled up by Yum! Brands, operator of KFC and Pizza Hut, in a deal worth $93.5 million in cash.
As part of the unsolicited offer, 100 per cent of Dragontail’s issued capital will be acquired by Yum! subsidiary Yum! Connect Australia for an aggregate consideration of $93.5 million.
If successful, Dragontail’s artificial intelligence (AI) kitchen order management and delivery technology is set to be scaled by Yum! on a global basis, as well as bring other unspecified Dragontail technologies in-house.
“With Dragontail, we expect to tap into the power of AI [artificial intelligence] to accelerate and further enhance our delivery technology capabilities, especially at Pizza Hut, and optimise the end-to-end food preparation process,” said Chris Turner, CFO at Yum! Brands.
The two companies already share a history, with Dragontail previously rolling out its AI platform, named Algo, and driver management technology for Pizza Pan Group, the Australian master franchisee for Pizza Hut.
In fact, Dragontail's technology is already in use by nearly 1,500 Pizza Hut stores in over 10 countries.
As such, Dragontail managing director Ido Levanon said the activities between Yum! and Dragontail have been complementary and contain “natural” synergy.
“Yum! Brands and Dragontail have been working in a fruitful collaboration for years. Dragontail's Board of Directors fully supports this transaction, which it considers to be an attractive opportunity for its shareholders. It will also provide Yum! Brands with innovative technology,” he said.
The deal, which is expected to close by the third quarter of 2021, is conditional to the approval of the Australian Federal Court approval and Dragontail shareholders, as well as other regulatory waivers and rulings.