NPC International Inc., the nation’s largest Pizza Hut franchisee, has agreed to buy 36 more units from the franchisor for $18.8 million and the costs of inventory, pre-paids and cash, the company said Thursday.
NPC, which went private last year in a $190 million offering led by private-equity firm Olympus Partners, already operates 1,151 Pizza Hut units in 28 states.
The restaurants to be acquired are located in the Jacksonville, Fla., market and include 27 delivery or carry-out stores and nine dine-in restaurants. Thirty of the stores generated $27.8 million in net sales in 2011, NPC said in a statement. The remaining six were not under Pizza Hut Inc. management for the full year.
In the quarter ended Sept. 27, 2011, NPC had reported sales of $237.8 million and net income of nearly $3.5 million.
NPC said the proposed purchase is consistent with its “objective to continue its growth within the Pizza Hut system.”
“These units are a perfect fit within our current geographical footprint, which will allow us to leverage our existing operational infrastructure and expand our presence in the Florida market,” Jim Schwartz, NPC’s chairman and chief executive, said in a statement.
The units being acquired include five fee-owned locations. The company said the acquisition will be funded with available cash and borrowings from the company’s $100 million revolving credit facility. It is expected to close in February.
As of the third quarter of 2011, the NPC’s operations represented about 19 percent of domestic Pizza Huts, which is owned by Yum! Brands International of Louisville, Ky.