The fast food company behind KFC and Pizza Hut is buying ASX-listed tech venture Dragontail Systems for $93m

- May 27, 2021 < 1 MIN READ
pizza being shared
Restaurant tech venture Dragontail Systems (ASX:DTS) is being acquired by the US parent company behind KFC and Pizza Hut, Yum Brands, in a deal worth $93.5 million.

Domino’s has been Dragontail’s leading customer in recent years. Its machine learning cameras monitor pizza quality and is the technology behind Domino’s Pizza Checker, as well as the popular customer order tracker. How long that deal lasts if Yum’s takeover is successful remains to be seen.

NYSE-listed Yum has been using Dragontail’s tech platform in nearly 1,500 restaurants in more than 10 countries.

Dragontail’s Algo platform has an algorithm that optimises and manages fast food preparation process from order to delivery. It automates and streamlines the kitchen flow using machine learning and AI.

Yum’s acquisition offer is at A$0.23.5 cents a share, up around a third on Wednesday’s closing price of $0.18 cents.

The binding agreement still needs shareholder, Australian legal and regulatory approval – Dragontail’s Board supports the deal – and if it proceeds, Yum plans to scale Dragontail’s AI-based order management and delivery technology globally. If all goes to plan, Yum expects the acquisition to close by the end of the third quarter of 2021.

Yum Brands Chief Financial Officer Chris Turner said: “With Dragontail, we expect to tap into the power of AI to accelerate and further enhance our delivery technology capabilities, especially at Pizza Hut, and optimize the end-to-end food preparation process.”

Kentucky USA-based Yum has more than 50,000 restaurants in more than 150 countries and estimates the all-cash acquisition will have an immaterial impact to its 2021 financial results.

Dragontail shares are up nearly 27% today in afternoon trade to A$0.23 cents