Yum Brands in exclusive talks to sell Pizza Hut to LongRange

Yum Brands is in exclusive talks to sell its Pizza Hut business to private equity firm LongRange Capital, according to a person familiar with the discussions. The negotiations are reported to be progressing toward a potential agreement within weeks, though no deal has been finalized and completion remains uncertain.

Yum began exploring strategic options for Pizza Hut last year after the brand’s performance trailed its sister chains. Pizza Hut has recorded 10 consecutive quarters of declining U.S. comparable sales and accounts for roughly 12% of Yum’s revenue.

Taco Bell and KFC have continued to grow while Pizza Hut’s U.S. sales have weakened. Yum has been reviewing whether the pizza business should be restructured, sold or repositioned as operational headwinds and softer consumer demand persisted.

Other firms that have shown interest in Pizza Hut include Sycamore Partners and Apollo Global Management. Private equity buyers pursuing legacy restaurant brands often focus on simplifying operations, re-franchising company-owned locations and cutting costs to improve margins.

Industry pressures affecting quick-service restaurants include higher food and labor costs and shifts in consumer spending and preferences. Those factors have squeezed profitability and weighed on public market valuations for some chains.

Yum’s strategic review of Pizza Hut is ongoing. Any transaction would be subject to final agreement and customary closing conditions.