Consistent with NPC International, Inc.’s objective to continue its growth within the Pizza Hut system, NPC announced that it had entered into an Asset Sale Agreement with Pizza Hut, Inc. and affiliates.
Through this, NPC has agreed to purchase from PHI 36 Pizza Hut units for $18.8 million in cash, plus an additional amount for inventory, prepaids, and store cash.
The units being acquired include five fee-owned locations.
This acquisition will be funded with available cash on hand and borrowings from the Company’s $100.0 million revolving credit facility.
The units to be acquired pursuant to the ASA are located in and around Jacksonville, Florida and are comprised of 27 delivery/carry-out units and 9 dine-in restaurants.
According to information provided to NPC, 30 of the units to be acquired generated $27.8 million in net product sales during the 53 weeks ended December 2011.
The remaining 6 units to be acquired are not included in these results because none of these units was open and/or under PHI management for a full year.
NPC expects the closing to occur in February 2012 and it is subject to obtaining customary approvals.
Jim Schwartz, Chairman and CEO of NPC International, Inc. says, “We are very excited to add this market to our portfolio and look forward to joining forces with the operations team in Jacksonville. 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.
This transaction clearly demonstrates our continued strong belief in the Pizza Hut system and our continuing partnership with our best-in-class franchisor.
We expect the transaction to improve our overall credit statistics.”