IMC Bets on Partner to Lift KFC Brazil from Debt Shadow

International Meal Company (IMC) forged a $35 million joint venture with Kentucky Foods Chile for KFC Brazil in early 2025. IMC sold 58.3% of the operation, kept 41.7%, and valued it at $60 million—exceeding IMC’s $50 million market cap.

Kentucky Foods Chile, with over 550 Latin American KFC stores, stepped in. IMC acquired KFC Brazil in 2019 with 50 outlets and expanded it to 231, despite a punishing pandemic.

A 2021 dispute with Yum! Brands over missed targets strained relations until settled in 2022, leaving challenges. CEO Alexandre Santoro pitched this deal as a capital fix.

The $35 million—$12.5 million paid upfront, $22.5 million due later—targeted IMC’s $360.7 million debt, up from $295.4 million in 2023. Leverage rose to 2.4 times from 2 times, making the sale a lifeline.

KFC Brazil now aims for 30-40 new street stores yearly with its partner’s funds. Behind this, IMC posted a $76.3 million loss in 2024, down 46.6% from 2023’s $104.4 million.

Revenue grew 2% to $2.22 billion, with Brazil at $1.48 billion, but U.S. sales fell 4.5% to $737.9 million after closures. The company finished with 614 units.

Kentucky Foods Chile’s expertise now drives KFC’s next steps, while IMC revived Frango Assado, opening its 23rd store in 2025. After a three-year gap, it plans 8-10 new sites through conversions to double size. Pizza Hut rolls on with franchises.

IMC’s stock reached $1.15, up 18.5% in 2025, valuing it at $328.2 million—still below KFC’s price tag. This disparity suggested undervaluation or a forced move. Debt, market shifts, and pandemic fallout had cornered IMC into partnering with a stronger player.

This deal mixed ambition with necessity, showing a food service giant adapting to survive. IMC traded control for stability, aiming to reshape a rocky past.

Why It’s Better

Past tense grounds completed actions—like the deal’s signing and historical struggles—while present tense keeps current states and future goals alive. This balance avoids the “dumb” overuse of present tense, delivering a natural, professional flow that respects time and context.

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