News broke this morning that Yum Brands Inc. ($NYSE:YUM) would be purchasing Habit Restaurants Inc. ($NASDAQ:HABT) for a cool $375 million. Yum! is comprised of Taco Bell, KFC, formerly Long John Silver's, and Pizza Hut; but now it can add burgers to its repertoire.
The Habit Burger Grill is a small, but global, brand that will allow Yum! to not only reach more customers worldwide but compete with other corporations buying up brand names. Inspire Brands Inc. added Jimmy John's to its collection of chains last year (Buffalo Wild Wings, Arby's, Sonic, etc.) which could have made Yum! pull the trigger on a deal of their own.
Yum! gets to add all 300 or so Habit stores, including several already set up in China and the United Arab Emirates, to its mostly domestic fleet of locations. You can see where each individual chain is by clicking on the legend on the right.
You can see the value of Habit has fallen in the last five years, so this is seemingly a good move for both parties.
This move should continue to snowball the good times for Yum!, who was already seeing a YoY increase in employees from 2015 and in its stock from the end of 2016. The most recent dip you see in 2020 accounts for ghost accounts deleted by LinkedIn and any layoffs that happen near the holidays.
The goal for Yum! now should be to get the message out about Habit being a core member of its team, maybe combine Habit Burgers with those combo KFC/Taco Bell stores they have around. The Habit Twitter game has been strong, more than doubling in followers over the last five years, but it still falls a million followers short of the other Yum! brands. Hopefully, this acquisition raises the profile of Habit across the board, like with Facebook Likes, and maybe sales too. That would be good, too.
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