Domino, which owns Pizza Hut and Pizza Express, is working to secure a $7 billion investment in its Domino brand in a deal that could lead to a significant boost to its stock price.
The deal will allow the company to invest in an expansion of its production facilities, said Michael D. Smith, Domino chairman and chief executive officer.
Domino also is working on a number of other investment projects, including its acquisition of Burger King Corp. and the purchase of Pizza Hut.
The investment is expected to close in early 2019, with an estimated value of about $7.2 billion, according to people familiar with the matter.
Dominos shares are up about 3% in premarket trading.
A strong return on investment is one of the reasons investors are turning to the company.
The company’s stock has surged nearly 100% this year and is up more than 8% this month, thanks to the expansion of operations and the prospect of an increase in revenue from the investment.
In the past three months, it has generated more than $20 billion in revenue.
The deal also could lead Domino to expand its existing production facilities in the U.S., said Joseph Schreiber, a portfolio manager at RBS Capital Markets, in a note to clients.
Pizza Express, the company that owns Pizza Huts and Pizza Subs, is expected invest in Domino.
The investment will provide additional flexibility in operating the Domino brands as it expands production facilities to meet growing demand for its brands, said a person familiar with its plans.
The two brands are part of a larger pizza business that also includes Pizza Hut, Domo’s Pizza, Pizza Hut’s Pizza and Pizza Plus, and the Italian restaurant chain Restaurant Brands Group, according a person with knowledge of the investment, who spoke on condition of anonymity.
Pizzeria Huts, which serves more than 50 million pizzas a day, is in the midst of a consolidation of its business, which is under the control of the franchisees who are franchisees, the person said.
Dominos Pizza, which operates restaurants, is owned by Pizza Hut Holdings Corp.
Palo Alto, Calif.-based Pizza Hut has struggled to attract customers in recent years.
The chain, which was the subject of the U-turn in January, reported a loss of $2.5 billion in 2016.
The franchisee deal has been under scrutiny in recent months as part of investigations into possible antitrust violations.
Domino’s has said it plans to add 1,500 jobs at the new production facility and has said that it plans not to increase wages.
The person familiar said the company is seeking bids for the project, and that the cost of the project is likely to exceed $1 billion.