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Editor's Note: Below is a brief excerpt from a complimentary research note written by our Consumables analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. |
McDonald's will sell artificial intelligence company Dynamic Yield to Mastercard, it announced Tuesday.
Terms of the deal were not disclosed, but the transaction is set to close in the first half of 2022. McDonald's will continue working with Dynamic Yield and Mastercard on digital initiatives.
MCD bought Dynamic Yield in 2019 for $300 million and was used in its drive-thrus and ordering kiosks in the U.S., Australia, and Canada to offer customers personalized promotions based on their purchase date, time of day, current store traffic, trending products, and other factors.
This spring, the sale follows reports that McDonald's was considering a partial sale of Dynamic Yield.
Many franchisees have complained in the past that Dynamic Yield didn't deliver the sales boost they expected and that its Technology failed to meet expectations.
Yet, they must pay a technology fee to the company. The acquisition by Mastercard will strengthen unique, existing synergies across McDonald's digital engagement experiences currently powered by SessionM and Test & Learn.
McDonald's plans to further scale and integrate Dynamic Yield's capabilities globally and reflect McDonald's more significant effort to outsource its Technology rather than own and operate it within the system.
The MCD CEO on the last earnings call:
- "There are certain times when it may make sense for us to go acquire a technology so that we can accelerate the development of that, make sure that it is bespoke to McDonald's needs."
- "But at some point that technology reaches a level of development where I think getting it to a partner who can then blow it out and scale it globally makes more sense."
Click HERE to listen to Consumables analysts Howard Penney discuss McDonald's (MCD) on The Call.
