Yum! Brands Inc. and The Habit Restaurants Inc. announced this week that Yum! Brands will acquire all issued and outstanding common shares of The Habit Burger Grill for approximately $375 million. The board of directors of The Habit Burger Grill, acting on the recommendation of a special committee composed of non-executive independent directors, unanimously approved the transaction.

The acquisition of The Habit Burger Grill will add a fast-casual concept with a loyal fan-base to Yum! Brands, the world’s largest restaurant company in terms of units and parent of the KFC, Pizza Hut and Taco Bell global brands. Founded in California in 1969, The Habit Burger Grill offers a flavor-forward variety of made-to-order items chargrilled over an open flame. The Habit Burger Grill, named Best Regional Fast Food in USA Today’s 2019 Best Readers’ Choice Awards, operates nearly 300 company-owned and franchised restaurants across the U.S. and in China.

From fiscal 2009 to 2018, The Habit Burger Grill grew its company-operated restaurant average unit volumes (AUVs) by 49.9%, from approximately $1.2 million to $1.9 million, respectively. In the same time period, The company grew its total units at a compound annual growth rate.

“We’ve emerged from our three-year transformation stronger and in a better position to accelerate the growth of our existing brands and leverage our scale to unlock value from strategic acquisitions,” Yum! Brands chief executive officer David Gibbs said.

“As a fast-casual concept with strong unit economics, The Habit Burger Grill is a fantastic addition to the Yum! family and has significant untapped growth potential in the U.S. and internationally," he continued. "With its delicious burgers and fresh proteins chargrilled over an open flame, The Habit Burger Grill offers consumers a diverse, California-style menu with premium ingredients at a [quick-service restaurant]-like value.”

Yum! Brands estimates minimal impact to earnings per share before special items in 2020, with accretion beginning in 2021 and increasing thereafter.

“Over the past few years, we’ve focused on becoming a total access brand by growing our delivery business, expanding our online ordering and mobile channels and enhancing the in-store experience by introducing drive-thrus, kiosks and technology-centric solutions for operations,” said Russell Bendel, president and CEO of The Habit Burger Grill. “We’re proud these and other actions have made The Habit Burger Grill an attractive candidate for a transaction of this kind.”

He continued, “On behalf of The Habit Burger Grill board of directors, this transaction represents an exciting new chapter to strengthen and significantly grow The Habit Burger Grill by leveraging Yum! Brands’ global scale, resources and franchising capabilities. We’re confident the agreement delivers immediate value to The Habit Burger Grill shareholders and will greatly benefit our beloved brand, team members, franchisees and loyal guests for many years to come.”

The transaction is subject to approval by The Habit Burger Grill’s stockholders, regulatory approval and other customary closing conditions. The transaction is expected to be completed by the end of the second quarter of 2020.

Following the closing of the transaction, The Habit Burger Grill will remain based in Irvine, Cal., and will continue to be managed by Bendel and chief financial officer Ira Fils. Bendel will report directly to Gibbs.