Yum! Brands: Completes Acquisition of Dragontail Systems

Louisville / KY. (yb) Yum! Brands Inc. announced the completion of its acquisition of Dragontail Systems Limited, an innovative provider of technology solutions for the food industry, following the successful implementation of the previously announced share scheme of arrangement in accordance with Australian corporations law.

Yum! Brands acquired all of the issued and outstanding common shares of Dragontail for AUD 0.235 per share in cash or a total of approximately AUD 93.5 million. With today’s announcement, following the approval by the Australian Federal Court and by Dragontail shareholders and certain other regulatory waivers and rulings, Dragontail is now a wholly owned subsidiary of Yum! Brands Inc. Yum! Brands estimates that this all-cash acquisition will have an immaterial impact on its 2021 financial results.

Dragontail’s platform is focused on optimizing and managing the entire food preparation process from order through delivery. Its connected, intelligent, end-to-end AI-based solution automates the kitchen flow combined with the process of dispatching drivers. It helps restaurants sequence and time each order, while planning optimal delivery routes and combining delivery orders by location. The technology also offers consumer-facing capabilities that enable customers to track their order en route. In addition, it can operate with outside food delivery partners.

«A key growth driver for our business and our teams is the continued acceleration of our digital and technology strategy, including how we leverage our global scale with investments in technology initiatives that enhance the customer and employee experience, strengthen restaurant unit economics and provide a competitive advantage for our franchisees,» said David Gibbs, Chief Executive Officer, Yum! Brands. «We’re excited to welcome Dragontail and its world-class talent to the Yum! family and look forward to deploying its AI kitchen order management, delivery and other technologies globally to our brands and franchisees over time.»

Yum! Brands is focused on the continued acceleration of its digital and technology initiatives across the globe, geared toward providing customers with new and seamless ways to access its brands, simplifying the lives of restaurant teams and improving unit economics for franchisees. Delivery, which Yum! Brands offers in over 39,000 restaurants, is a key part of the Company’s strategy, driven by a combination of expanded aggregator partnerships and continued investment in its own branded channels.

«Dragontail’s cutting-edge restaurant technology allows us to tap into the power of AI to optimize the end-to-end food preparation process and accelerate and further enhance our delivery technology capabilities,» said Chris Turner, Chief Financial Officer, Yum! Brands. «We believe Dragontail will make it easier for team members to operate and run a restaurant, help our franchisees strengthen their store operations and provide a superior experience for customers.»

Dragontail’s kitchen order management and delivery technology is deployed across nearly 1,500 Pizza Hut restaurants in over 10 countries. Many Pizza Hut restaurants leveraging Dragontail’s platform have already seen a positive impact on sales, order fulfillment and customer satisfaction scores, including product freshness and delivery time.

Yum! Brands’ purchase of Dragontail also brings in house other Dragontail emerging technologies, including its QT AI camera quality control system.

Dragontail’s Managing Director Ido Levanon commented, «It is exciting to see the completion of the acquisition of Dragontail by Yum! Brands, who we have been collaborating with for years. This transaction is a positive one for Dragontail shareholders and it provides Yum! Brands with even more innovative technology. We look forward to working together to deploy this technology to more Yum! Brands restaurants around the world.»

The addition of Dragontail to the Yum! portfolio marks the Company’s third technology acquisition in 2021. In March, Yum! Brands acquired the business of Kvantum, Inc., an AI-based consumer insights and marketing performance analytics company with a proven track record of adding significant value in enabling data-driven decisions to drive return on advertising dollars and increase sales. That same month, Yum! Brands also acquired Tictuk Technologies, a leading omnichannel ordering and marketing platform company offering more ways for consumers globally to access and order its brands through text, social media and other conversational channels.

Transaction Details

With this announcement, Dragontail Systems Limited is now a subsidiary of Yum! Brands, Inc., and will continue to be operated as an independent brand.

The Dragontail business unit, as part of Yum! Brands, will continue to offer technology solutions to its existing clients.

Dragontail employees will primarily be located in Israel, the U.S. and Australia, and will continued to be managed by Dragontail’s Managing Director Ido Levanon.

Baker McKenzie acted as lead legal advisor to Yum! Brands and Thomson Geer acted as legal advisor to Dragontail Systems Limited.

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