Continuing its inorganic expansion, India Hospitality Corporation (IHC) has acquired the franchise of Pizza Hut brand for central India for an undisclosed amount. The brand was earlier with Treasure Food & Beverage Pvt Ltd, a unit of realty firm Entertainment World Developers Pvt Ltd (EWDPL).
Treasure Food operates two Pizza Hut outlets, one each in Indore and Bhopal, said a company statement. It also manages fine dining outlets and the food court at EWDPL’s Treasure Island Mall in Indore. The transaction is yet to get approval from Yum Brands, the parent company of Pizza Hut.
IHC has also entered into an agreement with EWDPL through its wholly-owned subsidiary Gordon House Estates Pvt Ltd (GHEPL) to manage latter’s hotels and food and beverage (F&B) outlets. As part of the plan, IHC will lease and operate 10 hotels and 14 F&B outlets of EWDPL being developed across several malls in India.
IHC has agreed to lease the first phase of EWDPL’s hotel portfolio for a period of 30 years for a minimum lease guarantee rental payment with a revenue sharing agreement. EWDPL has been developing 900 hotel rooms across 10 locations, while the fist phase of development includes 352 rooms across Nanded, Ujjain, Jabalpur, Bhilai and Raipur.
IHC will manage the hotels under its brands called ‘Gordon House’ and ‘You’. Further, the agreement allows IHC the right to lease on second phase developments as well, that include another 548 hotel rooms.
In a reverse agreement, EWDPL has acquired a 15% stake in GHEPL in conjunction with the overall transaction. The investment in GHEPL will be completed through phased transactions over the next three years at a value equivalent to IHC’s equity investment in GHEPL, increased by 12% per annum.
Ravi Deol, MD & CEO, IHC stated that the transaction gives Gordon House a leadership position in the hospitality markets of central and west India with over 1,000 rooms under development. “The agreement catapults IHC-owned food brands across India’s fastest growing consumption markets,” added Deol.
Some of IHC’s earlier acquisitions in India include SkyGourmet Catering Pvt Ltd, a flight catering business in July 2007; Mars Restaurants Pvt Ltd, a multi-brand restaurant chain; and Gordon House Hotels from Mars Group in the same year.