Pizza Hut, the chain that raised a generation on its pan pizzas served on red-checkered tablecloths, has a new owner.
On Tuesday, Yum Brands said 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 the private equity firm LongRange Capital for $1.5 billion. Yum China, a separate entity, will acquire Pizza Hut’s restaurants in mainland China for $1.2 billion.
Yum Brands also owns Taco Bell and KFC. Those chains have been performing well even as many consumers cut back on eating out, yet Pizza Hut has been a drag on the parent company’s overall performance.
“These transactions enable Yum to be a more focused company,” Chris Turner, chief executive of Yum Brands, said in a news release.
Yum Brands said in November that it was exploring strategic options for Pizza Hut. Excluding mainland China, Pizza Hut has about 15,500 restaurants in 108 countries and generated approximately $10 billion in annual sales.
Shares of Yum Brands were up about 2 percent at $158 in early trading Tuesday.
Pizza Hut was founded in 1958 by two brothers who borrowed $600 from their mother to open a pizza restaurant in Wichita, Kan. It became the country’s largest pizza chain when the brothers sold it to PepsiCo in 1977 for $300 million, about $1.6 billion today.
Under PepsiCo, Pizza Hut expanded in the 1980s and 90s, the heyday for the chain. Back then, families across the country strolled into the restaurants with their recognizable red thatched roofs, settled into red leather booths and sipped soda from red plastic cups.
In the late 90s, PepsiCo spun off its restaurant operations — which included Pizza Hut, Taco Bell and KFC — into what would later be named Yum Brands.
Yum Brands rebranded Pizza Hut as largely a carry-out operation, which resulted in the chain losing market share in the competitive pizza arena.
While a number of locations have shuttered over the years, including 250 stores in the first half of this year, the company continued to open new restaurants as well.
LongRange Capital, a relatively small private equity firm, started in 2019 in Stamford, Conn. It has acquired or taken stakes in a hodgepodge of midsize companies, including 24 Hour Fitness, the gym chain; U.S. Synthetic, a developer of technologies for the energy and mining industries; and Batesville, a maker of caskets and other funeral products.
“Pizza Hut is a beloved global brand with a rich heritage and a loyal customer base that few brands can match,” said Bob Berlin, a founder and managing partner at LongRange.
