Yum Brands to Buy Habit Burger Grill -- Update
06 Enero 2020 - 8:38AM
Noticias Dow Jones
By Heather Haddon
Yum Brands Inc. said it would buy fast-casual burger chain Habit
Restaurants Inc. as it seeks to broaden its range of restaurants
and reach more customers.
Yum said Monday it had struck a deal to buy the California-based
parent of Habit Burger Grill for $14 a share, or about $375 million
in cash. Habit's shares closed Friday at $10.51, giving it a
valuation of around $275 million. The companies said they expect
the deal to close early this summer.
Yum, the parent company of fast-food chains KFC, Pizza Hut and
Taco Bell, said Habit's fast-casual model has strong potential for
international expansion. The chain of around 280 restaurants in the
U.S. and China has specialized in chargrilled burgers since opening
in 1969.
The deal is Yum's first acquisition of a stand-alone restaurant
chain since the company went public in 1997. Yum, formed by a
spinoff of the restaurant holdings of PepsiCo Inc., is the world's
largest restaurant company by stores, with more than 49,000 in 145
countries.
More U.S. restaurants companies have expanded to own a suite of
brands as they seek to keep up with changing dining trends and grow
internationally. Fast-casual burger chains in particular have
proliferated in recent years.
"We thought it was a sweet spot within fast-casual," Yum's Chief
Executive David Gibbs said in an interview. Mr. Gibbs took the helm
of Louisville, Ky.-based Yum this month, replacing veteran CEO Greg
Creed.
Private-equity backed Inspire Brands Inc. last year bought Jimmy
John's Gourmet Sandwiches, adding it to a portfolio that includes
the Sonic burger chain, Arby's and Buffalo Wild Wings. Privately
held JAB Holding Co. and Focus Brands are also broadening their
brand holdings.
Habit has said it hopes to grow to more than 2,000 locations
with backing from Yum.
"There is plenty of runway left," Habit CEO Russell Bendel said
in an interview.
Yum said the deal would have a minimal impact on earnings this
fiscal year, with profits expected from the acquisition beginning
in 2021. Habit will be run independently within Yum, as are Yum's
other brands, Mr. Gibbs said. The company expects to maintain
Habit's existing management team and headquarters in Irvine,
Calif.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
January 06, 2020 09:23 ET (14:23 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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