Case Type: Merger & Acquisition
Case Style: Interviewer Led
Industry: Restaurant & Food business
Case Type: Merger & Acquisition
Industry: Food business
Case by McKinsey
Celestial Pizza (CP) is an American restaurant chain and an international franchise known for its Italian American cuisine menu. They specialize in pizza, pasta, side dishes, and desserts. They operate on a franchise model where individuals own and manage stores and pay a franchise fee to CP. Sales & operations for these stores are managed by the Franchise owners but all major business decisions like selecting menu items, look and feel of the stores, etc are controlled by Celestial Pizza’s central management teams.
As part of its growth strategy, CP is considering the acquisition of Martian Cream (MC), an ice cream manufacturer and retailer with presence in US markets. They specialize in all sorts of ice cream based desserts including ice cream shakes; cones; cups & bars etc. They too operate on franchise model, though its a little different than CP. While CP franchises restaurants; MC franchises regions in which franchise owners are required to open a certain number of stores.
CP’s CEO has hired Mckinsey to advise him on whether they should acquire MC or not. What would you recommend ?
Additional information (To be provided on request)
- Cream based dessert consumption per capita in US is $10/ year. It is expected to grow 100% organically in next 5 years.
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This is an interviewer led strategy case where the candidate is required to help Celestial Pizza in making a M&A decision. Needless to say that final recommendation must include facts derived using appropriate quantitative analysis.