Goldman, Sachs & Co. served as financial advisor and Mayer Brown is serving as legal advisor to Yum! Brands. Kirkland & Ellis LLP served as legal advisor to Grubhub Inc.
Yum! Brands (NYSE: YUM), one of the world’s largest restaurant companies, and Grubhub (NYSE: GRUB), the nation’s leading online and mobile takeout food-ordering company, signed a new partnership to drive incremental sales to KFC and Taco Bell restaurants in the U.S. through online ordering for pickup and delivery.
YUM also entered into an agreement with Grubhub to purchase $200 million of common stock, subject to customary closing conditions, an investment that will provide Grubhub with additional liquidity to accelerate expansion of its industry-leading U.S. delivery network, drive more orders to YUM restaurants, and further enhance the ordering and delivery experience for diners, restaurants and drivers.
The unique partnership aligns with YUM’s long-term strategies to make its iconic brands easier for consumers to access and drive profitable incremental sales growth for franchisees. Grubhub will be YUM’s only national partner providing dedicated support for KFC and Taco Bell branded online delivery channels, along with access to Grubhub’s online ordering platform, logistics and last-mile support for delivery orders, and point-of-sale integration to streamline operations. KFC, Taco Bell and Grubhub will engage in joint marketing initiatives that will generate new diners and drive order frequency for existing diners.
KFC, Taco Bell and Grubhub will work with franchisees to test and roll out online ordering for pickup and delivery to thousands of participating KFC and Taco Bell restaurants in the U.S. markets Grubhub serves. When the initial phase of this Grubhub partnership is launched over the coming months, KFC will offer door-to-door delivery of its freshly hand-prepared Original Recipe® chicken and other menu items to consumers in the U.S. The partnership will help bring Taco Bell’s innovative menu items like Doritos Locos Tacos and the signature Crunchwrap Supreme® to more Taco Bell fans where, when and how they want it.
Finally, as a part of the partnership, Grubhub will expand its board of directors from nine to 10 members and appoint Pizza Hut U.S. President Artie Starrs to the newly created board seat as an independent director. Pizza Hut, which serves and delivers more pizza than any other pizza company in the world, fulfills more than 100 million delivery transactions in the U.S. annually and manages a world-class network of drivers. Grubhub and Pizza Hut will work together to determine how best to leverage their respective scale and expertise.
Kirkland & Ellis LLP advised Grubhub Inc. with a team including Technology & IP transactions partners Seth Traxler, Adam Petravicius and associate Matt Darch; with the investment led by corporate partner Ross Leff (Picture) and associate Marishka DeToy, with assistance from corporate partners Josh Korff, Daniel Wolf and Laura Sullivan.
Involved fees earner: Ross Leff – Kirkland & Ellis; Marishka DeToy – Kirkland & Ellis; Joshua Korff – Kirkland & Ellis; Daniel Wolf – Kirkland & Ellis; Laura Sullivan – Kirkland & Ellis; Seth Traxler – Kirkland & Ellis; Adam Petravicius – Kirkland & Ellis; Matthew Darch – Kirkland & Ellis;
Law Firms: Kirkland & Ellis;
Clients: Grubhub Inc.;