Reportedly, McDonald’s took almost 20 Years to move back into acquisitions and mergers. But presently it has come back to deal-making, as it plans to build on its tech-heavy tactic with calculated digital investments. The Chicago-based fast-food company publicized on March 25 that it is taking over Dynamic Yield—a personalized data start-up—marking its biggest takeover in over two decades and it’s first in a technology company. Just 7 Days later, it declared a second technology investment in Plexure—a mobile application vendor—which controls its mobile application in 48 nation outside of the U.S.
Both the agreements are comparatively small for the fast-food titan, which has a market valuation of $143.73 Billion. The Dynamic Yield contract is worth at over $300 Million, as per to sources familiar with the situation, whereas, McDonald’s spent approximately $3.7 Million on a 9.9% stake in Plexure. McDonald’s collaboration strategy follows a general style across the broader consumer and retail industries. The latest report of A.T. Kearney forecasts that smaller-scale and strategic agreements would characterize most of the M&A (mergers and acquisitions) activity in those industries this year. Bahige El-Rayes—A.T. Kearney’s Partner and Co-Author of the report—told to CNBC, “Broadly speaking, we observe major retailers and restaurants focus on strengthening their portfolios with abilities they are missing. Often those abilities do not exist within and building them in-house would be timely, costly, and the results would be unknown.”
On a similar note, recently, McDonald’s was in news for using AI (artificial intelligence) for drive-thru purchases. McDonald’s declared its purchase of machine learning startup Dynamic Yield that it will be utilizing the company’s AI at over 1,000 of its cafeterias’ drive-thru windows in the upcoming 3 Months. The system would monitor aspects such as time, weather, and traffic levels at the restaurant, local events, historical sales data, and trending popular items plus customers’ preference while ordering food to improve menu displays at the drive-thru.