Olympus Partners to buy NPC International

Terms of the deal for the largest Pizza Hut franchisee not disclosed

NPC International Inc., the nation’s largest Pizza Hut franchisee, said Monday it has agreed to a sale to private-equity firm Olympus Partners.

Terms of the deal were not disclosed, but sources told Bloomberg in September [3] that major shareholder Bank of America was seeking $800 million. Stamford, Conn.-based Olympus said Monday it would not comment until after the deal is completed, which NPC said was expected before the end of the year.

Overland Park, Kan.-based NPC and its parent company, NPC Acquisition Holdings Inc., said in a statement that the acquisition is expected to be financed, in part, by a senior credit facility to be arranged through Barclays Capital and Goldman, Sachs & Co.

NPC, which operates 1,153 Pizza Huts in 28 states, also on Monday reported essentially flat year-over-year net income of $3.5 million for the third quarter, which ended Sept. 27. Revenue rose slightly to $237.9 million from $237.2 million in the prior-year quarter. Same-store sales increased 0.4 percent, rolling over a 10.9 percent increase in the third quarter last year.

“During the third quarter our comparable-store sales strengthened from the first half of the year returning to positive territory despite rolling over very strong comparable-store sales growth from the prior year,” Jim Schwartz, NPC’s president and chief executive, said in a statement.

As of the third quarter, NPC said its operations represented 19 percent of the domestic system for Pizza Hut, which is a division of Louisville, Ky.-based Yum! Brands Inc.

The pizza franchisee said it has “promoted strong value focused on our lower cost carry-out channel with our $10 Any Carry-Out Pizza promotion, coupled with the re-introduction of the $5 P’Zone which resonated well with consumers during these challenging economic times.”

During the quarter, NPC opened 13 new delivery-carry-out units, boosting new-store development for the year by 17 locations.

NPC did not address the Olympus Partners deal in releasing the third-quarter earnings. Bank of America had acquired its interest in NPC in the 2009 takeover of Merrill Lynch & Co., which had paid $615 million for the pizza franchisee in May 2006.

NPC in its year-end 2010 filings said it owned the land or the buildings for 19 of its restaurants and leased the land or buildings for 1,117 restaurants.

Olympus Partners manages more than $3 billion in investments in such sectors as healthcare services, financial services, consumer products and business services.

Olympus’ foodservice-related investments, according to its website, include: Ann’s House of Nuts; K-Mac Enterprises Inc. of Fort Smith, Ark., which franchises 140 Taco Bell and KFC restaurants in Arkansas, Missouri, Oklahoma and Texas and Golden Corrals in Arkansas and Missouri; Pennant Foods Corp of Knoxville, Tenn., which franchises 89 Wendy’s in Southern California and Eastern Tennessee; Pepper Dining of Charlotte, N.C., which franchises more than 90 Chili’s Grill & Bars in the Northeast and Mid-Atlantic.

Contact Ron Ruggless at [email protected] [4].
Follow him on Twitter: @RonRuggless [5]