Pizza Hut, the chain that raised an entire generation with its pan pizzas served on red checkered tablecloths, has a new owner.
On Tuesday, Yum Brands announced it had agreed to sell the pizza chain to two companies in a combined deal valued at $2.7 billion.
The restaurants in the United States and around the world, excluding mainland China, will be acquired by private equity firm LongRange Capital for $1.5 billion. Yum China, a separate entity, will acquire Pizza Hut restaurants in mainland China for $1.2 billion.
Yum Brands also owns Taco Bell and KFC. These chains performed well even as many consumers cut back on dining out, but Pizza Hut held back the parent company’s overall performance.
“These transactions allow Yum to be a more focused company,” Chris Turner, chief executive of Yum Brands, said in a press release.
Yum Brands said in November that it was exploring strategic options for Pizza Hut. Excluding mainland China, Pizza Hut has approximately 15,500 restaurants in 108 countries and generated annual revenue of approximately $10 billion.
Shares of Yum Brands were up about 2% at $158 in early trading Tuesday.
Pizza Hut was founded in 1958 by two brothers who borrowed $600 from their mother to open a pizzeria in Wichita, Kan. It became the nation’s largest pizza chain when the brothers sold it to PepsiCo in 1977 for $300 million, or about $1.6 billion today.
Under PepsiCo, Pizza Hut grew in the 1980s and 1990s, the chain’s heyday. Back then, families across the country wandered into restaurants with recognizable red thatched roofs, sat in red leather booths and sipped soda from red plastic cups.
In the late 1990s, PepsiCo spun off its restaurant operations – which included Pizza Hut, Taco Bell and KFC – to later become Yum Brands.
Yum Brands rebranded Pizza Hut as largely a takeout operation, causing the chain to lose market share in the competitive pizza space.
Although a number of locations have closed over the years, including 250 stores in the first half of this year, the company has also continued to open new restaurants.
LongRange Capital, a relatively small private equity firm, started in 2019 in Stamford, Connecticut. It has acquired or taken stakes in a mix of mid-sized companies, including 24 Hour Fitness, the gym chain; US Synthetic, a developer of technologies for the energy and mining industries; and Batesville, a manufacturer of caskets and other funeral products.
“Pizza Hut is a beloved global brand with a rich heritage and loyal customer base that few brands can match,” said Bob Berlin, founder and managing partner of LongRange.
