Pune: Private equity (PE) firm NSR Advisors’ bid to buy the Pizza Hut and KFC restaurant business from Dubai-based Dodsal Group, one of the biggest franchisees of Yum! Brands Inc., which owns the two brands in India, has failed over valuation issues, according to three people familiar with the development.
The deal fell through because the promoters were expecting between Rs1,000-1,500 crore for their stake in the company and NSR Advisors was not willing to pay that much, said the three people, who declined to be named. NSR is an India-focused fund with more than $1 billion (about Rs4,860 crore) under management.
Off the menu: A KFC outlet at the Netaji Subhash Place Metro station in Shalimar Bagh in the Capital. Harikrishna Katragadda / Mint
An executive at NSR Advisors confirmed the deal was off, but denied valuation was the point of dispute. The talks failed because the two parties, which had been in negotiations since June, “could not agree on a few non-financial terms, including certain promoters’ guarantees and warranties that we wanted from them”, the executive said.
Darius Pandole, partner at NSR, and Tojy Joseph, head of operations for Dodsal Group’s Yum! Brands business in India, declined to comment.
The Dodsal Group runs at least 62 outlets of Pizza Hut and KFC in western and southern India. Had the deal materialized, it would have been the second PE funding for a Yum! Brands franchisee. In mid-2007, NYLIM Jacob Ballas India Fund acquired a 21.5% stake in Devyani International, the Pizza Hut and KFC franchisee for northern and eastern markets, with 72 outlets for Rs300 crore, valuing the firm at Rs1,500 crore.