Yum! To Sell Long John Silver's, A&W To Franchisees
Yum! Brands Inc. has signed definitive agreements to sell Long John Silver's Inc. and A&W Restaurants Inc. to two separate groups of franchisees, the company said Thursday.
Terms of the deals were not disclosed.
The Louisville, Ky.-based Yum Brands, which also franchises KFC, Pizza Hut and Taco Bell, said Long John Silver's would be sold to LJS Partners, a consortium of franchisees and other investors. A&W Restaurants will be sold to A Great American Brand, which Yum described as a "franchisee leader with substantial interest in A&W restaurants."
Both sales are expected to be completed in the fourth quarter, Yum said.
"As we continue to sharpen our long-term growth focus on international expansion and improving our U.S. brand positions in KFC, Pizza Hut and Taco Bell, Long John Silver's and A&W no longer fit our long-term growth strategy," Yum Brands chairman and chief executive David Novak said in a statement.
Yum noted that the two sales would not have a material impact on corporate earnings or cash flow.
Goldman, Sachs & Co. acted as Yum's exclusive financial advisor on the sales.
Yum! Brands, then called Tricon Global Restaurants, bought Long John Silver's and A&W from Yorkshire Global restaurants for $320 million in cash in March of 2002.
In January of this year it announced plans to sell those brands to focus on its larger concepts. It said at the time that the two brands together accounted for 1,630 units.
In announcing its second quarter results in July, which included a 28 percent decline in domestic operating profit, Yum! stressed the importance of international expansion as its growth vehicle, particularly with Pizza Hut and KFC, as it continues to work on turning around Taco Bell.
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— Contact Bret Thorn