Restaurant Brands gets taste for Hawaiian food chains
Restaurant Brands NZ has plans to buy Hawaiian fast food giant Pacific Island Restaurants for US$105m.
The Hawaiian food business is the sole franchisee of both Taco Bell (37 stores) and Pizza Hut (45 stores) across Hawaii, Guam and Saipan.
Restaurant Brands NZ operates 173 outlets across the Carl’s Jr KFC, Pizza Hut and Starbucks Coffee chains and intends the purchase to diversify earnings away from its home base.
Russel Creedy, CEO of Restaurant Brands, said “The acquisition of PIR provides the next stage to Restaurant Brand’s growth platform and aligns with our growth strategy.
“It also provides an entry point into the Hawaiian market, which has a similar total population to Auckland and is currently benefitting from positive economic growth.
“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.”
Total group sales of $256.2m were up 22 percent on 1H 2016 with $43.6m revenue from the April 2016 KFC acquisition (of QSR Pty Limited) in Australia.
KFC sales in NZ were up $4.2m with newly built Carl’s Jr. stores delivering another $1m in sales.
The total operating revenue was $266.9m, up $48.5m on the previous year.
Same store sales increased by 1.4 percent with KFC, Pizza Hut and Starbucks Coffee all showing growth.
The purchase will be funded by a $94m sale of shares to existing holders and $US42m of debt.
The sale is expected to be completed by late December, reports Inside Retail, 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.
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.