Sentinel invests in new Pizza Hut platform

Marks Sentinel's Third Investment In The Quick-Service Restaurant Sector And Second In The Yum! Brands System

NEW YORK, August 18, 2008 - Sentinel Capital Partners, a private equity firm that invests in promising, smaller middle market companies, today announced the acquisition of 123 Pizza Hut restaurants in the central Los Angeles and Inland Empire markets. Sentinel acquired the restaurants in a corporate divestiture transaction from franchisor Pizza Hut, Inc., a subsidiary of Yum! Brands, Inc. This is Sentinel's third investment as a franchisee in the quick-service restaurant sector and its second in the Yum! Brands system. Sentinel's two prior quick-service restaurant investments—Border Foods, a Taco Bell franchisee (part of Yum! Brands), and Falcon Holdings, a Church's Chicken franchisee—were both highly successful. Sentinel made the acquisition through an investment in newly-formed Southern California Pizza Company, which now owns the 123 Pizza Huts and the underlying real estate for many of the properties.

All 123 restaurants are located in four contiguous southern California counties—Los Angeles, Riverside and San Bernardino, and Orange County. Measured by store count, Southern California Pizza is the largest Pizza Hut franchisee in California and among the 10 largest franchisees in the 7,515-store U.S. Pizza Hut system. Sentinel also recruited Jerry Ardizzone, a seasoned industry executive with 19 years of experience in the Pizza Hut system, to be CEO.

"We are pleased to have made our second investment in the Yum! family and to have renewed our relationship with Yum! For Sentinel, it is a privilege to manage the Pizza Hut brand in Los Angeles, one of the best quick-service pizza markets in the country," said Sentinel senior partner John McCormack. "We are impressed with Pizza Hut and the direction in which CEO Scott Bergren and his team are taking the brand," McCormack added.

"I am very happy to return home to Pizza Hut," said CEO Jerry Ardizzone. "There are tremendous growth avenues in front of us in the Los Angeles market in which we have excellent new store development opportunities."

"We are excited about the opportunity to partner with Jerry Ardizzone, a seasoned Pizza Hut operator," said Sentinel partner Jim Coady. "Together, we are building an outstanding management team to run the business and we very much look forward to a successful long-term partnership with Jerry and Pizza Hut," added Coady.

The investment in Southern California Pizza Company is consistent with Sentinel's successful investment history in restaurants and franchising. Prior Sentinel investments in the quick-service restaurant sector includes Falcon Holdings, a Church's chicken franchisee, and Border Foods, a Taco Bell franchisee, both highly successful transactions. Sentinel has also successfully invested in franchisors in other industries, including Cottman Transmissions Systems, a provider of automotive after-market services, and Interim Healthcare, the largest home nursing healthcare provider in the nation.

The Pizza Hut transaction is the latest in a highly productive period for Sentinel in terms of both new investments and realizations. Since August 2007, Sentinel has closed five new investments, one significant add-on acquisition, and the highly successful sale of one portfolio company.