Rutland Partners, the London-based turnaround specialist and restructuring investor, has acquired Pizza Hut UK’s c340-strong restaurant business from US owner Yum! Brands for an undisclosed sum.
The company is also committing £20m over the next three to five years to refurbish the group’s estate and upgrade its products and training programmes. Pizza Hut’s management team, led by Jens Hofma, will remain in place following the deal.
Meanwhile, a newly created group Yum! (III) UK, led by managing director Mark Fox, will focus on the Pizza Hut delivery business
Hofma said: “I am truly delighted that we have secured new investment into the business. The 10,000 strong Pizza Hut Dine-In team is on a mission to put our guests at the centre of everything we do and to inject fun, energy and quality back into our restaurants.
“Throughout the sale process, Rutland Partners, above all others, has demonstrated a level of ambition and enthusiasm that matches our own drive for the transformation of our business. The entire team is relishing the opportunity to work with Rutland in the years ahead.”
Nick Morrill, managing partner of Rutland, said: “We are excited about the iconic appeal of the Pizza Hut brand and itsstatus as the leading casual dining brand in the UK. The business has hadits fair share of challenges over the past few years but the management team has put a clear turnaround plan in place that has already led to much improved performance over the past 12 months.
“We have been very impressed by the energy and capability of the team at all levels of the business and we are excited by the prospect of working with the management to drive the turnaround to completion.”
Clearwater Corporate Finance advised Hofma and the management team of the Pizza Hut dine-in operation. Partner Marc Gillespie said: “Jens and his team have a clear strategy for returning one of the best-known consumer brands back to be the leading casual dining business in the UK.
“They have already made significant improvements to the business in the past 12 months and with Rutland Partners support they now have an ideal investor to help them fully execute their turnaround plan.”
The Pizza Hut restaurant business, which does not include Pizza Hut takeaways, was placed on the market last October.
The acquisition represents a first move into the restaurant space for Rutland, which previously backed Edinburgh Woollen Mill and has a current investment in Brandon Hire, the tool and equipment hire company.
Rutland was believed to have secured the deal ahead of Risk Capital Partners, the Luke Johnson-led investment vehicle, the other party that had made it through to the final stages of talks for the chain.
One of the main hurdles to completing the deal was thought to be the level of the annual royalty fee due to Yum! going forward and the fact that the business includes around 100 loss-making leases.
The group was reportedly seeking a buyer with a clear strategy to exit these leases and to “invest in a modernisation programme and generate strong ongoing royalties”.
