Jubilant Foodworks announced it is acquiring a 35 per cent stake in food tech enterprise Hashtag Loyalty Private Limited (HLPL) for an all-cash consideration of Rs 24.75 crore. The company said in a regulatory filing to the Bombay Stock Exchange that it expects to close the transaction sixty days after the execution of the share subscription agreement and the share purchase agreement.
"This investment reflects the Company’s intent of making strategic investments in promising startups and emerging businesses and is in line with the stated goal of building a multi-brand and multicountry food business powered by technology," Jubilant Foodworks stated in its filing.
The Domino's Pizza and Dunkin' Donuts' parent informed that as the agreement, the company would the right to nominate two non-retiring directors and an observer to HLPL's board. "The Agreement inter-alia also provides for certain rights in the nature of information rights, rights in respect of reserved matters, Exit rights, Pre-emptive rights, and the like as customary in similar transactions," the company informed in the filing.
Hashtag Loyalty registered revenues totalling Rs 1.13 crore in FY 2020.
The development assumes significance as Jubilant Foodworks had recorded a 58 per cent increase in its second-quarter profit, revealed last week. This was on the back of strong delivery and takeaway channels. The restaurant chain had stated the system sales grew 11.6 per cent in Q2 compared to the year-ago period. It added there was a continued thrust in delivery and takeaway channels which grew 36.8 per cent and 72.2 per cent in the quarter ending September 30. Also, more than 7.2 million app downloads were recorded in the quarter.