Yum! Brands Inc. (NYSE: YUM) announced an agreement to acquire The Habit Restaurants Inc. (NASDAQ: HABT) (The Habit Burger Grill) for approx. $375 million. The deal, which equals $14 per share in cash, is expected to be completed by the end of the second quarter of 2020.
Yum! plans to finance the transaction using cash on hand and
available borrowing capacity under its credit facilities. After the close of
the deal, Habit Burger will continue to be run by CEO Russell Bendel, who will
report to Yum’s CEO David Gibbs.
David Gibbs, CEO of Yum! Brands,
said, “We’ve emerged from our three-year transformation stronger and in a
better position to accelerate the growth of our existing brands and leverage
our scale to unlock value from strategic acquisitions. As a fast-casual concept
with strong unit economics, The Habit Burger Grill is a fantastic addition to
the Yum! family and has significant untapped growth potential in the US and
internationally.”
During the period from 2009 to
2018, The Habit Burger Grill grew its company-operated restaurant average unit
volumes by 49.9%, from approx. $1.2 million to $1.9 million. The company has
been working to improve its customer experience through delivery partnerships
and digital capabilities.
Shares of Yum! were down slightly in afternoon hours but Habit’s stock skyrocketed 32% after the deal was announced.