McDonald's to Buy Digital Marketing Startup -- WSJ
March 26 2019 - 3:02AM
Dow Jones News
By Heather Haddon and Dana Mattioli
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 26, 2019).
McDonald's Corp. is buying Israeli digital startup Dynamic Yield
Ltd., in a bid to improve in-store ordering and online marketing at
the burger giant.
As part of the deal announced Monday, McDonald's will pay more
than $300 million for closely held Dynamic Yield, people familiar
with the matter said. The deal is the fast-food giant's first
acquisition in years and its biggest in two decades.
McDonald's will use Dynamic Yield's technology at its
drive-through windows, where digital displays will change in
real-time based on factors such as weather and what the customer is
ordering. During heat waves, for instance, a drive-through display
could promote a McDonald's ice-cream cone.
The move is a sign of the burger chain's increasing willingness
to dabble in new technologies to better compete in the fiercely
competitive fast-food industry. McDonald's is aggressively
expanding technology in its restaurants through self-ordering
kiosks, a mobile-pay function and through delivery with Uber
Technologies Inc.'s UberEats service. Chief Financial Officer Kevin
Ozan has said that McDonald's wants to focus this year on better
promoting its delivery service.
Dynamic Yield helps retailers provide personalized digital
promotions to consumers using streams of customer data. Its
customers include IKEA, Forever 21 and Fendi, according to the
company's website.
The move is a rare one for McDonald's, whose last sizable deal
was its acquisition of chicken-restaurant chain Boston Market for
$173.5 million in 1999. It later sold the chain to Sun Capital
Partners Inc. McDonald's took a stake in Chipotle Mexican Grill
Inc. in 1998 and increased it before selling its position in the
burrito-chain in 2006. By dollar amount, that stake was larger than
the price of the Dynamic Yield acquisition. Still, the deal is a
drop in the bucket for a company with a market value of $142
billion.
Dynamic Yield will remain a stand-alone company whose employees
will continue to operate out of offices around the world. The
company also will continue to serve its current clients and look to
acquire new ones.
Write to Heather Haddon at heather.haddon@wsj.com and Dana
Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
March 26, 2019 02:47 ET (06:47 GMT)
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