Restaurant Brands New Zealand Ltd. agreed to buy a total of 70 KFC and Taco Bell stores in Southern California from a U.S.-based franchisee of Yum! Brands Inc.-owned KFC US.
The fully debt-funded acquisition covers 59 KFC stores and 11 combined KFC and Taco Bell stores, along with a head office facility, for a purchase price of US$73 million. The New Zealand-based restaurant operator will additionally pay for recent store refurbishment and customary working capital adjustments. The company is completing a refinancing exercise to add extra capacity to its borrowing facilities.
The acquired assets generate a combined annual turnover of $95 million and a 12-month trailing EBITDA of in excess of $12 million, the company said.
Restaurant Brands NZ, which operates quick service and takeaway restaurants in New Zealand, Australia and Hawaii, expects the deal to help build its presence in the U.S.
"We are delighted to take the next step in Restaurant Brands' growth strategy. This acquisition provides us with a solid beach head in the US with significant opportunities for further development," Restaurant Brands NZ Chairman José Parés said.
Restaurant Brands said it will retain the stores' 1,100 part-time and 500 full-time staff that are employed by the franchisee. The company did not disclose the name of the franchisee.
The settlement date is expected by March 2020, subject to customary conditions including approval from Yum! Brands, which owns the KFC and Taco Bell brands, as well as from the stores' landlord.