Management Buyout

Pricoa provides financing to support management buyout

Pizza Hut (UK) Limited is the sole franchisee for Pizza Hut restaurants in the UK, serving 24 million customers per year through a nationwide estate of 262 sites, making it one of the leading casual dining restaurants in the UK.

In early 2018, Pricoa Capital Group financed the management buyout (MBO) of Pizza Hut, led by CEO Jens Hofma. The MBO enables the incumbent management team to become majority owners of the business with a new franchise agreement in place with the brand owner, Yum! Brands. Pricoa was chosen as the financing partner due to its relationship approach and ability to structure a bespoke transaction delivering this level of ownership to the management team.

Pizza Hut aimed to build on its successful investment strategy, which saw a complete redesign of the restaurant estate, renewed focus on customer experience and a relaunch of the menu. The patient, long-term nature of Pricoa’s capital and its follow-on investment appetite were supportive of management’s ambitions to drive further growth in the UK market, including potential new restaurant openings.

The transaction delivered a liquidity solution for shareholder Rutland Partners, who purchased the business in 2012.

Pricoa’s financing was comprised of senior debt, a capex line, subordinated debt and preferred equity. In addition, HSBC provided a revolving credit facility. Management were advised by Clearwater International.