Pizza Hut, the 68-year-old chain, will be sold for $2.7 billion by parent company Yum Brands. Yum Brands said Tuesday that the private equity firm LongRange Capital will buy Pizza Hut, excluding the mainland China business, for about $1.5 billion.
Pizza Hut’s Struggles
In mainland China, Pizza Hut will be purchased by Yum China Holdings Inc. for approximately $1.2 billion. China is Pizza Hut’s second-largest market outside the U.S., accounting for 19% of sales. Yum Brands, which also owns KFC and Taco Bell, began to explore its options for Pizza Hut in November. Last year, Yum Brands’ global sales rose 5% but Pizza Hut’s sales fell 2%.
Pizza Hut has been struggling with growing competition and outdated restaurants. In February, Yum Brands announced plans to close 250 U.S. Pizza Hut locations. Pizza Hut had 19,974 restaurants worldwide at the end of last year. The chain has been further pinched in recent years by the growth of DoorDash, Uber Eats, and other restaurant delivery companies which marketed access to a slew of cuisines besides pizza.
Future Plans
By selling Pizza Hut, Yum Brands can focus more on its brands with stronger sales, Yum CEO Chris Turner said. “Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” Turner said in a statement. Connecticut-based LongRange Capital was founded in 2019 by Bob Berlin, who previously engineered a turnaround at Arby’s when he led private equity investments at The Baupost Group.
Original reporting: Texarkana Gazette — read the source article.
