Directional Capital acquires Pizza Hut in pre-pack administration deal

Directional Capital has acquired Pizza Hut’s UK dine-in restaurants after the business entered a pre-pack administration.

Talks to take over the 139 restaurants, operating as Heart With Smart, have been concluded after the chain was sold out of administration, saving around 3,000 jobs. 

US-based private equity firm Directional Capital already operates Pizza Hut restaurants in Sweden and Denmark. 

The deal follows the appointment of Will Wright and Chris Pole from Interpath as joint administrators of Heart With Smart Restaurants. As soon as the appointment was made, Interpath sold the business and its assets to the Directional Capital-owned DC London Pie.

The business was previously owned by Pizza Hut UK’s management, led by chief executive Jens Hofma and investor Pricoa, who had acquired it for a reported £100m in 2018.

The group had reportedly been searching for buyers since November to mitigate the impact of tax hikes announced in the autumn budget.

Heart With Smart was among 220 hospitality businesses that signed a letter to the chancellor warning of job cuts and closures due to the impending increase in employer National Insurance Contributions.

Commenting on the deal with Directional Capital, Hofma said: “Over the past six years, we have made great progress in building our business and strengthening our operations to become one of the UK’s leading hospitality franchise operators, all while navigating a challenging economic backdrop. With the acquisition by Directional Capital announced today, the future of the business has been secured with a strong platform in place.”

Dwayne Boothe from Directional Capital, added: “This transaction marks an important milestone for Directional Capital as we continue to build the Directional Pizza platform into a premier food and beverage operator throughout the UK and Europe. Directional Pizza continues to invest in improving food and beverage across its growing 240-plus locations in Europe and the UK."

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