Pizza Hut, where sales have lagged with arrival of delivery culture, will be sold for $2.7 billion

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Pizza Hut, the 68-year-old chain that has long struggled with growing competition and outdated restaurants, will be sold for $2.7 billion by parent company Yum Brands.

Yum said Tuesday that the private equity firm LongRange Capital will buy Pizza Hut, excluding the mainland China business, for about $1.5 billion.

The mainland China Pizza Hut will be purchased by Yum China Holdings Inc. for approximately $1.2 billion, the company said. China is Pizza Hut's second-largest market outside the U.S., accounting for 19% of sales.

Yum Brands, which also owns KFC and Taco Bell, began to explore its options for Pizza Hut in November. Last year, Yum Brands' global sales rose 5% but Pizza Hut's sales fell 2%.

In February, Yum Brands announced plans to close 250 U.S. Pizza Hut locations. Pizza Hut had 19,974 restaurants worldwide at the end of last year.

“Pizza Hut has long been the weak link in Yum’s portfolio,” Neil Saunders, managing director of GlobalData, wrote Tuesday. “Despite efforts to revitalize the brand and shut underperforming locations, it has become increasingly clear that pushing the division back into growth will require a level of investment and patience that Yum is just not prepared to commit to.”

Pizza Hut was founded in 1958 in Wichita, Kansas, by two brothers who borrowed $600 from their mother to open the store. They chose the name because their sign only had room for eight letters.

Pizza Hut’s familiar red roof debuted in 1969 and by 1971 it was the top pizza chain in the world by sales. PepsiCo acquired Pizza Hut in 1977 but spun off its restaurant division — which became Yum Brands — in 1997.

By the 1980s, Domino's was the fastest-growing U.S. pizza company, buoyed by its promise of 30-minute delivery. As carryout and delivery grew in popularity, Pizza Hut was saddled with large, dine-in restaurants.

The chain has been further pinched in recent years by the growth of DoorDash, Uber Eats and other restaurant delivery companies which marketed access to a slew of cuisines besides pizza.

By selling Pizza Hut, Yum Brands can focus more on its brands with stronger sales, Yum CEO Chris Turner said.

“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry," Turner said in a statement.

Yum Brands, based in Louisville, Kentucky, expects the sale in U.S. and China to close in the third quarter. The company's stock rose 3% Tuesday.