Louisville, Ky.-based Yum! Brands, Inc. announced Tuesday its plans to place its Long John Silver’s and A&W All-American Food Restaurants for sale, and has begun a process to identify a buyer.
The company explained it is sharpening its long–term growth focus on building leading brands in every significant category in China, driving aggressive international expansion, and improving its U.S. brand positions by building new dayparts and sales layers at Taco Bell, Pizza Hut and KFC.
“We do not believe Long John Silver’s and A&W All-American Food restaurants fit into our long-term growth strategy,” said David C. Novak, Yum! Brands Inc. chairman and chief executive officer. “Accordingly, we have decided to put these two great brands up for sale and we will complete the sale only once the right buyer or buyers have been identified and we can ensure a seamless transition.”
Novak noted that over the past decade, Yum! has delivered annual earnings per share growth of 13 percent. “This has been driven by aggressively building restaurants in China and Yum! Restaurants International at a pace of nearly four new restaurants every day of the year."
About 65 percent of the company’s profits are from the China and Yum! Restaurants International divisions. The company expects that percentage to grow to 75 percent by 2015, according to the news release.
In the United States, Taco Bell accounts for about 60 percent of the company’s profits, followed by Pizza Hut and KFC.
Yum! Brands is the world’s largest restaurant company in terms of system restaurants with more than 37,000 restaurants in more than 110 countries and territories.
The Long John Silver’s and A&W All-American Foods Brands account for a total of 1,630 restaurants, all of which are owned and operated by franchisees.
The company does not expect the eventual sale to have a material impact to its ongoing earnings or cash flow.