NPC International, Inc. (“NPC” or the “Company”) today announced that it has reached an agreement with Pizza Hut, whose parent company is Yum! Brands, Inc., on the optimization of its restaurant portfolio and that it will launch a sale process for its Pizza Hut restaurants.
The agreement with Pizza Hut follows an extensive analysis that the parties conducted of its entire Pizza Hut portfolio to best position NPC’s Pizza Hut business for long-term success, and has the support of the ad hoc group of NPC’s first lien lenders. The agreement allows NPC to close up to 300 of its Pizza Hut restaurants, a substantial majority of which are dine-in, among other terms. In conjunction with the sale process, this key agreement provides NPC with flexibility to explore options for achieving a value maximizing outcome as it seeks to finalize the terms of a comprehensive financial restructuring and emerge from Chapter 11.
The optimization of NPC’s Pizza Hut restaurant footprint is expected to increase the potential value that could be generated from the Pizza Hut business, either through the sale path, or if value is not maximized through such effort, through a standalone plan of reorganization, and possibly through a hybrid of the two options. This deal provides tremendous benefits to NPC and its stakeholders by positioning the NPC Pizza Hut business to drive operational excellence through a streamlined portfolio and allowing for new development to rebuild and modernize Pizza Hut assets in viable trade areas, which will strengthen and benefit the broader Pizza Hut system and its loyal customers. Existing Pizza Hut customers will continue to be served through alternative, nearby locations throughout Pizza Hut’s 6,700 restaurants nationwide.
No final determinations have been made regarding which restaurants will ultimately be closed, nor on the timing for any closures. NPC and Pizza Hut will endeavor to reallocate employee resources to thriving locations at NPC and other Yum! brands locations, wherever possible.
NPC International, Inc. is Pizza Hut’s largest franchisee in the U.S., and its portfolio of 1,227 locations represents 20% of the Pizza Hut system’s restaurant base in the U.S. Each year, NPC’s 23,000 plus team members proudly serve over 68 million pizzas to Americans in 27 states. NPC has been a leading franchisee for almost six decades, and over that time has invested hundreds of millions of dollars in building and acquiring its restaurants.
Interested parties should reach out to the Company’s financial advisors, Greenhill & Co., to receive initial information. Greenhill may be reached by sending an email to Neil Augustine ( [email protected] ),Thomas McCarthy ( [email protected] ) or Nick Drayson ( [email protected] ).
Weil, Gotshal & Manges LLP is acting as NPC’s legal counsel, Greenhill & Co., LLC is acting as financial advisor, AlixPartners LLP is serving as restructuring advisor, and A&> Realty is acting as real estate advisor to the Company.
About NPC International
NPC International, Inc. is the largest franchisee of any restaurant concept in the U.S., based on unit count, and the fifth largest restaurant unit operator, based on unit count, in the U.S. The Company, which is headquartered in Leawood, Kansas and has a shared services center located in Pittsburg, Kansas, has a total of approximately 7,500 full time employees and approximately 28,500 part time employees at both Pizza Hut and Wendy’s, and operates in 30 states and District of Columbia.