YUM - Yum! Brands Adds a Burger Chain. Does It Signal a Shift in Strategy?
If you're a fan of quick-service food, you've probably picked up dinner at a Yum! Brands (NYSE: YUM)-operated chain. Its brands include KFC, Pizza Hut, and Taco Bell, with over 48,000 quick-service restaurants (QSRs) in 145 countries, making it one of the world's largest restaurant companies.
Earlier this month, Yum! Brands announced its first foray into the burger category with a definitive agreement to acquire Habit Restaurants (NASDAQ: HABT) for $14 per share in cash, or a total of about $375 million. Yum! says it plans to fund the deal using cash and debt. The acquisition is expected to close in the second quarter of 2020.
Although The Habit Burger Grill is known as a burger chain, the menu also offers chicken sandwiches, salads, and ahi tuna at its nearly 300 company-owned and franchised restaurants across the U.S. and China (about two-thirds of its locations are in California). With backing from Yum!, Habit hopes to grow to 2,000 locations.