Bain Capital takes a slice of Japanese pizza market with Domino’s acquisition

City A.M. Reporter
US PRIVATE equity firm Bain Capital said on Monday it would acquire the Japan franchisee of Domino’s Pizza as it sees opportunities in the country’s niche pizza delivery market.

Bain Capital said in a statement that it would buy Japanese firm Higa Industries from Duskin, Daiwa SMBC Capital and Ernest Higa, the founder of Higa.

“In Japan pizza delivery is a niche business and home delivered pizza is treated as a speciality item so there is less price sensitivity,” David Gross-Loh, a managing director at Bain Capital in Tokyo told Reuters. He said delivered pizza is priced higher in Japan than in the US and that this boosts opportunities for the development of new products and marketing.

Domino’s Pizza charges 3,900 yen, or $43, for a large pizza with roasted chicken topped with anchovy sauce, according to the company’s website. Even a medium pizza with just cheese and tomato sauce costs about $10.

Domino’s Pizza currently only operates in Tokyo and Osaka, Japan’s two largest cities, so there is considerable scope for expansion, Gross-Loh added.

Bain did not disclose the purchase price although Duskin, which owns 44 per cent of Higa, said it was selling its stake for 2.64bn yen ($29m), making the entire company worth about 6bn yen.