Endeavour United exits Pizza Hut Japan
Endeavour United, a Japanese private equity firm established by the team behind turnaround investor Phoenix Capital, has ended its five-year tenure as owner of Pizza Hut Japan with a sale to Yamae Group Holdings
The price was not disclosed. Yamae, which is listed in Tokyo, generated JPY 503bn (USD 3.8bn) in sales last year, mostly from food wholesale and raw materials, feed, and livestock and marine products.
Endeavour acquired Pizza Hut Japan and associated entity Phoenix Foods in 2017 from Mitsubishi Corporation-controlled KFC Holdings Japan. Tokyo-listed KFC – which holds the Japan master franchises for KFC and Pizza Hut – said the sale was driven by a need to strengthen the Pizza Hut business in the face of intensifying competition.
At the time, there were 370 outlets nationwide, split between directly managed stores in metropolitan areas and franchised stores outside of major cities. It was the third largest pizza chain in Japan with an 18.6% market share, trailing Four Seeds and Domino's.
There are now approximately 500 stores. Sales for the 12 months ended March 2022 came to JPY 20.9bn, while net profit was JPY 1.35bn, according to a filing. In 2017, sales and net profit were JPY 14.3bn and JPY 40m, respectively.
Over the same period, market leader Domino’s – part of Australia-listed Domino’s Pizza Enterprises – has risen from 493 stores and AUD 418.1m (USD 297m) in sales to 800 stores and AUD 777.4m in sales.
Phoenix Capital was established in 2002 and has invested in more than 40 companies, while Endeavour was formed in 2013 as a subsidiary of Phoenix to pursue a different investment remit. Two funds have been raised under the Endeavour brand – the first closed on JPY 22.7bn in 2016 and the second closed on JPY 35.1bn in 2018.
The firm made five investments in 2021 and there have been five more so far this year. Recent activity includes the acquisitions of Bridgestone Corporation’s chemical products solutions unit, construction business Minamisouken, and interior design and renovation player Hometech. It also sold iron and wire fittings supplier Nippon Katan.
Private equity investors have long had exposure to Western quick service restaurant concepts in Japan. Bain Capital previously owned Domino’s Japan, while the Affinity Equity Partners portfolio currently includes Burger King Japan and The Longreach Group is an investor in Wendy’s First Kitchen.
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