The struggling Pizza Hut restaurant chain will be sold for $2.7bn by parent company Yum Brands.

Yum Brands said in February that it was considering selling Pizza Hut and the chain looked to close 250 US restaurants. The pizza chain has struggled with outdated stores and growing competition.

Pizza Hut was founded in 1958 in Wichita, Kansas. PepsiCo acquired the chain in 1977 but spun off its restaurant division – which became Yum Brands – in 1997.

Private equity firm LongRange Capital is buying Pizza Hut, excluding the mainland China business, for about $1.5bn, the company said Tuesday. The mainland China Pizza Hut will be bought by Yum China Holdings Inc for approximately $1.2bn, it 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,” Yum Brands CEO Chris Turner said in a statement.

Yum Brands, whose other brands include KFC and Taco Bell, began a strategic review to explore options for Pizza Hut in November, with the chain reporting declining sales at comparable stores.

“Pizza Hut has long been the weak link in Yum’s portfolio,” Neil Saunders, managing director of GlobalData, said in a statement. “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.”

By selling Pizza Hut, Yum Brands can focus more on its brands with stronger sales, he added.

Yum Brands, based in Louisville, Kentucky, expects both transactions to close in the third quarter. The company’s stock declined slightly before the market open.