Pizza Hut has a new owner… or two. The iconic pizza chain is being sold in a $2.7 billion deal, splitting ownership between a U.S. private equity firm and a Chinese restaurant company.
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LongRange Capital will take a $1.5 billion slice of Pizza Hut’s business outside of mainland China. Meanwhile, Yum China Holdings will sell off Pizza Hut China for $1.2 billion, the company announced on June 16.
“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” Yum Brands CEO Chris Turner explained in the release.
LongRange Capital was founded in 2019 by Bob Berlin, who’s no stranger to the fast-food game after leading a turnaround at Arby’s. On Tuesday, Berlin said he’s ready to “drive its next phase of growth” with Pizza Hut’s executive team and franchisees, per CBS News. Meanwhile, Yum China, previously a slice of Yum! Brands, was spun off in 2016.
Pizza Hut’s Multi-Billion-Dollar Sale Comes After Stiff Competition from Domino’s and DoorDash
Meanwhile, the sale follows years of underperformance for Pizza Hut. According to Yum’s latest earnings report, the pizza chain’s sales growth has lagged behind its siblings, KFC and Taco Bell. According to CBS News, in February, Yum! Brands also announced it would close 250 U.S. locations.
Pizza Hut has been losing ground to Domino’s, which has reportedly outpaced it in ordering, delivery, menu innovation, and marketing. The rise of delivery apps like DoorDash has also intensified the pressure. Customers are increasingly opting for online orders over dining in.
The decision comes after a tough year for Pizza Hut. Citing data from restaurant consulting firm Technomic, CBS News reported that the pizza chain’s U.S. sales fell by 8.2% last year.
The Pizza Hut story began in 1958 in Wichita, Kansas. Founders Frank and Dan Carney reportedly chose the name because their sign only had space for eight letters. PepsiCo acquired the chain in 1977, later spinning off its restaurant division into what is now Yum! Brands.
Hopefully, the new owners have enough dough to deliver success for the nostalgia-driven pizza chain.