The Habit Restaurants is now owned by Yum! Brands, which also claims Taco Bell, Pizza Hut, Kentucky Fried Chicken and other luminaries of American fast food under its belt, according to a release.
The Habit Restaurants was acquired by Yum! after approval by stakeholders of The Habit Burger Grill. This marks the first time Yum! has counted a fast-casual brand among its arsenal of eateries.
Yum! acquired Habit for $14 per share and a total of around $375 million. The deal was funded with cash on hand and utilizing the company's available borrowing ability.
The Habit Burger Grill was founded in 1969 as a venue for made-to-order burgers and other items chargrilled over an open flame. They also serve chicken sandwiches, sushi-grade chargrilled ahi, salads and more.
The restaurant grew its average unit volumes (AUVs) from around $1.2 million in 2009 to $1.9 million last year, representing a 53.9 percent increase during that period. The restaurant has grown from 26 locations in California to 271 locations across 13 states, along with locations in China.
Under the new agreement, The Habit Burger Grill will remain based in Irvine, California, and will operate as an independent subsidiary of Yum! Brands. CEO Russ Bendel will report directly to Yum! CEO David Gibbs.
Gibbs said the acquisition made sense because of Habit's potential for growth in areas of the country that don't have access to one of the restaurants. Franchisees will have new opportunities with another brand added, he pointed out. Habit will also be able to utilize Yum! Brands' resources to help expand its own repertoire in terms of building a brand and expanding.
Yum! Brands said there would likely not be much change to the non-GAAP earnings per share this year, but that the numbers would start to go up in 2021 as accretion began.
Bendel called the day "historic" and said the partnership would bring the restaurant to new heights by leveraging Yum!'s global scale.
Yum! has been performing well as of late, with worldwide sales seeing increases during the fourth quarter last year.