Yum Brands has closed its $1.5 billion sale of Pizza Hut’s assets outside of China to LongRange Capital, according to a pair of press releases from Yum and the buyer. Last month, Yum closed its $1.2 billion sale of Pizza Hut China to Yum China Holdings.
Yum has the chance to earn a further $75 million from the deal by 2030 based on Pizza Hut’s performance. Chris Turner, Yum’s CEO, said the transaction will make the company a more focused firm going forward.
Freed from the perennially troubled pizza chain, Yum’s “unmatched digital capabilities and scale and our relentless focus on the future consumer, strengthening restaurant economics and leveraging Byte by Yum! will allow us to accelerate growth and deliver sustainable long-term value for our shareholders,” Turner said.
Eduardo Luz, former CEO and President of P.F. Chang’s, is leading Pizza Hut on an interim basis, according to LongRange’s press release. Luz said the sale would help Pizza Hut focus on its franchisees and guests.
“With LongRange’s support and resources, we are well-positioned to invest in the brand and build on Pizza Hut’s legacy as we enter this next chapter,” Luz said.
Earlier this summer, analysts expressed some doubt that Pizza Hut could sustain a dramatic turnaround.
“The valuation is a bit higher than we expected and going private could enable a more drastic turnaround effort, but the track record of similar deals isn't great,” Peter Saleh, managing director and restaurants and food distributor analyst of U.S. Bancorp | BTIG, said in a June report
Mark Wasilefsky, head of TD Bank’s Restaurant Franchise Finance Group, said that the advent of widely available digital ordering and delivery through third-party aggregators over the last decade has eliminated one of the QSR pizza segment’s major advantages.
