Pizza Hut to be sold to LongRange Capital

Pizza Hut is being sold to both LongRange Capital and Yum China in two separate deals for $2.7 billion, parent company Yum Brands said on Tuesday.

“These transactions enable Yum to be a more focused company that continues to leverage scale, technology and talent to accelerate our raising the B.A.R. priorities and deliver sustained value for our stakeholders,” Yum CEO Chris Turner said in a statement this morning. “Under LongRange and Yum China, Pizza Hut will be well-positioned for future growth with ownership that brings deep expertise in the restaurant industry.”

LongRange was founded in 2019 and has five major investments: The synthetic diamond company US Synthetic, the casket maker Batesville, convenience food company Bakkavor, ski resort company Alpin Unlimited and the fitness chain 24 Hour Fitness. The firm has about $1.7 billion in capital under management and says that it takes a longer-term approach to investing, focusing on operational and strategic improvements to generate a return, rather than financial engineering.

Company history

Yum Brands spun off its China division in 2016.

Yum launched a formal strategic review of the Pizza Hut chain in November, in which parent company Yum Brands disclosed it was considering a possible sale or other divestiture options as the business continued to face ongoing sales and market share declines in its core U.S. market.

At that time, Yum Brands said the intent of the process is for Pizza Hut to reach its “full potential for the benefit of its franchisees, consumers, and employees and to maximize value for Yum” shareholders.

Yum recently entered exclusive talks with LongRange Capital, which beat out offers from Sycamore, according to a recent Bloomberg report.

Meanwhile, Yum Brands and Yum China have agreed to certain financial incentives that will generate value for both companies’ shareholders should KFC China’s future system sales growth rates accelerate. In addition, the companies will work together to further advance long-term growth plans for Taco Bell in Mainland China.

Sale details

Yum will sell Pizza Hut outside of China to LongRange for approximately $1.5 billion. Additionally, Yum has the opportunity to receive an earn-out of $75 million by 2030.

Yum will sell Pizza Hut China to Yum China for approximately $1.2 billion. Across the two transactions, Yum expects to receive approximately $2.3 billion of net proceeds after taxes, closing adjustments and transaction-contingent fees, excluding the earn-out. Yum additionally expects to incur one-time expenses of approximately $85 million during the remainder of 2026.

Notably, Yum will continue to provide its in-house tech stack, Byte by Yum, to Pizza Hut outside of China, and will also provide certain corporate services to the chain under a transition services agreement.

The company expects both transactions to close in the third quarter.

Pizza Hut was founded in 1958 in Wichita, Kan., by brothers Dan and Frank Carney. In 1977, it was acquired by PepsiCo, which spun off its restaurant division, also including KFC and Taco Bell, in 1997 into a new company called Tricon Global Restaurants. Tricon Global changed its name to Yum Brands in 2002.

“Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum's history,” Turner said.