OVERLAND PARK Kan. Pizza Hut Inc. and its largest franchisee, NPC International Inc., have agreed to sell each other units in separate transactions that will see the franchisor buy 70 stores for $19.6 million and NPC purchase 191 units for $52.9 million. The sales and purchases will leave each party with contiguous and less scattered operations, the participants said.
If the deals close as planned by December, NPC would increase its holdings to about 1,099 restaurants, with a net gain of 121 outlets for roughly $275,000 each. Pizza Hut’s outlay would pencil out to roughly $280,000 for the 70 stores it buys.
NPC, based here, said it would use a $75-million revolving credit facility, cash reserves and the proceeds from the sale of the 70 restaurants to fund its purchases, which have been split into two transactions.
The first deal calls for the company to buy 89 stores from Pizza Hut for $26.4 million. Eight-two of the outlets are located in Tampa, Fla., and the other seven are in Cedar Rapids, Iowa. Forty-six are delivery-takeout units, and the remainder are dine-in restaurants. NPC said the restaurants generated in excess of $79.1 million in sales for the year ended in September.
NPC’s second purchase deal calls for the $26.5-million acquisition of 52 units in Kansas City, Mo., and 50 more in North Atlanta, Ga. Seventy are delivery-takeout sites.
Of the 70 units that Pizza Hut has agreed to buy from NPC, 27 are in Jackson, Miss., 20 are in Spokane, Wash., 20 are in Savannah, Ga., and three are in the outskirts of Jacksonville, Fla. Twenty are delivery-takeout shops. The restaurants generated more than $54.4 million in sales for the year ended in September, NPC said.
Jim Schwartz, NPC chairman and chief executive, said his company’s objective is to position operations into contiguous growth markets. “We are strong believers in the Pizza Hut brand and believe that now is an excellent time to increase our investment in the brand while maintaining the requisite financial flexibility to navigate these not-so-ordinary times,” he said in a statement.
NPC currently operates 978 Pizza Hut dine-in restaurants and delivery or carry-out units in 27 states.
