00:00Yum Brands just agreed to sell Pizza Hut for $2.7 billion,
00:04but most of it is going to a private equity firm,
00:07not another restaurant chain.
00:09So what does that actually mean for Pizza Hut?
00:11Here's what's happening.
00:12Pizza Hut was bought by PepsiCo in 1977,
00:15then spun off in 1997 to become Yum Brands.
00:18Yum also owns KFC and Taco Bell,
00:21but now it's selling Pizza Hut entirely.
00:23The China business goes to Yum China,
00:25but the rest goes to a private equity firm
00:27called Long Range Capital for $1.5 billion.
00:30Now, private equity means a firm buys a company,
00:33mostly with borrowed money,
00:34to make it more profitable and sell it again later.
00:37Long Range also owns 24 Hour Fitness
00:40and a funeral company called Batesville.
00:42But Pizza Hut is actually joining a bigger club
00:44than most people realize.
00:45Subway is owned by Rourke Capital,
00:48the same firm behind Arby's, Dunkin' and Sonic.
00:50Burger King is partly owned by a firm called 3G Capital,
00:54and Whataburger that was family run out of Texas
00:56for 70 years is now majority owned
00:58by a firm called BDT Capital Partners.
01:01So plenty of your favorite chains
01:03already answer to private owners,
01:04not the stock market.
01:05Yum says it is now leaner
01:07and can focus on growing KFC and Taco Bell.
01:09Industry insiders say this was bound to happen
01:11as Pizza Hut's been losing ground to Domino's for years,
01:15never fully recovering from dropping the dine-in model.
01:17Supporters like analysts from eToro Sam North
01:20call it a turnaround story.
01:22He says the price of the sale isn't spectacular,
01:24but it removes a persistent drag from Yum's portfolio.
01:27So here's the question.
01:29Is private equity the fresh start Pizza Hut needs,
01:31or is this just a new owner
01:32trying to squeeze more out of a tired brand?
01:34Drop your take in the comments
01:36and follow us here for more.
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