Clearwater International and PwC advise on MBO of Pizza Hut UK

30 April 2018 3 min. read

Pizza Hut UK has successfully completed its management buyout (MBO) with the support of consultants from PwC and Clearwater International. The consultancies ensured the reputed £100 million deal went smoothly as the top brass at Pizza Hut UK wrested control of the high street fast food business from private equity backer Rutland Partners.

The Pizza Hut UK management team, led by CEO Jens Hofma, played a vital role in the franchise’s impressive turnaround in fortunes since 2012. Consistent sales growth under the new image (Pizza Hut Restaurants UK is a separate entity from the moped delivery service) has seen EBITDA rise by more than £17 million.

Now, as Pizza Hut UK regains its independence from private equity backers, PwC has advised on a second sale of the company in less than a decade. PwC was also involved in the initial deal in 2012, advising Yum! Brands – the global franchisor of Pizza Hut which also operates KFC and Taco Bell – on its sale of Pizza Hut UK to Rutland Partners. The British private equity firm has overseen a huge £60 million investment programme in the past five years which has redesigned the menu, venues nationwide, and the customer service experience – however, with the collapse of another Rutland-owned high street presence, Maplin, the firm has been keen to consolidate its holding elsewhere.

PwC and Clearwater served up £100 million pizza deal

The UK Corporate Finance department of Big Four professional services firm PwC acted as lead financial advisor to Rutland. Playing a key role were Joanne Hartley, Simon Moore, Olivia Lonsdale, Matthew Watmore and Rick Jones. The team also provided due diligence and tax restructuring advice, as well as debt advisory services.

Corporate finance house Clearwater International advised the senior leadership team of Pizza Hut UK. Partner and Head of Consumer, Gareth Iley, worked closely with Director Helen Lowe, with key support provided by Clearwater’s Debt Advisory team, consisting of Partner Chris Smith and Director Lachlan Dorrity.

To execute the MBO, Hofma and his team were assisted with funding from the Pricoa Capital Group, the international private capital investment wing of PGIM, itself an arm of American life insurance giant Prudential. The new ownership structure now have another franchise agreement in place with Yum! Brands.

Slice of success

“Five years ago, we began an incredible journey and we’re now experiencing the true extent of the positive impact Rutland Partners’ investment and guidance has made to the business”, said Hofma in his comments on the deal.

“As we take control of the next stage, our mission remains unchanged: to be the most loved place to eat and work, and I’m delighted with the funding and backing Pricoa is providing to allow that to be possible and for the partnership we continue to enjoy with the wider Yum! Business.”

Gareth Iley, Partner at Clearwater International, saluted the “exceptional job” Hofma and his team have executed in re-establishing Pizza Hut as a market leader in the UK’s casual dining scene.

“Clearwater International are pleased to have assisted the team in securing a new funding provider to support the business in its next stage of growth, as well as putting long-term control back into the hands of the team driving the strategy,” he added.