Restaurant Brands bids for Hawaiian chain
Restaurant Brands NZ plans to buy Pacific Island Restaurants, the largest fast food operator in Hawaii to diversify its earnings away from New Zealand where it runs the KFC, Pizza Hut, Starbucks Coffee and Carl’s Jr food chains.
The Kiwi-based chain has also posted a 0.7 per cent increase in first half profit to $13.5 million for the 28 weeks to September 12.
Total group sales were $256.2 million, up 22 per cent from the previous corresponding period, with the bulk of the increase coming from its acquisition of QSR Australia, the biggest KFC franchisee in NSW, which added $43.6 million of sales.
Combined brand EBITDA was up $9.3 million to $45.3 million with the New Zealand businesses delivering $2.1 million of the increase and the QSR acquisition the $7.2 million balance.
The Auckland-based company has offered $US105 million ($NZ147 million) for PIR, which operates 82 Taco Bell and Pizza Hut stores, it said in a statement.
It will be funded by a $94m sale of shares to existing holders and $US42m of debt.
It expects to complete the sale by late December, conditional on approval from Yum! Brands, which is the franchisor for PIR’s Taco Bell and Pizza Hut stores and Restaurant Brands’ existing KFC and Pizza Hut operations.
Restaurant Brands, New Zealand’s largest fast-food operator with 173 stores, is expanding into new markets to drive future earnings growth, opening new burger chain Carl’s Jr in New Zealand and expanding into KFC in Australia where it has 42 stores.
To improve profitability in its legacy businesses, the company has been refurbishing and adding to its local KFC outlets, exiting low performing Pizza Hut stores and closing its worst performing Starbucks Coffee outlets.
PIR is the sole Taco Bell and Pizza Hut franchisee in Hawaii, Guam and Saipan, is profitable with a stable management team and provides the opportunity for future investment, Restaurant Brands said.
“The acquisition of PIR provides the next stage to Restaurant Brand’s growth platform and aligns with our growth strategy,” chief executive Russel Creedy said. “We also see a number of other potential bolt-on opportunities in the market that we may look to pursue over time where they make strategic and financial sense.”
Its 20-year Starbucks Coffee franchise expires in 2018 and the company said it’s in talks with the franchisor about the future of the brand. It didn’t provide further details.