Papa John's gets $200m investment and new chairman
Shares jumped following the announcement.
Global pizza chain Papa John's announced that the hedge fund Starboard Value is investing US$200 million into the company, with the possibility of adding another US$50 million by March 29.
The struggling pizza chain will also expand its Board, and will name Starboard Value CEO Jeffrey Smith as its new chairman. Anthony Sanfilippo, former CEO of the gaming company Pinnacle Entertainment, will also join the board.
Founder John Schnatter resigned as chairman of the board last year after news broke that the had used a racial slur during a conference call. The company has since distanced itself from Schnatter, who submitted his own financial proposal to the board.
The company says they plan to use approximately half of the proceeds of the investment to repay debt, with the remaining proceeds providing financial flexibility that enables them to invest capital to "further advance its five strategic priorities."
"Our agreement provides new expertise and additional financial resources to invest in areas that we believe are important to our customers and the opportunities ahead. Quality and how our product brings people together will be front and center in our efforts," Papa John’s President and Chief Executive Officer Steve Ritchie said in a statement.
Locally, Papa John's recently opened a new location in Bromley. Franchised by a former Papa John’s delivery driver Abassin Badshah who joined them in 2002, he now employs more than 30 local people across his two outlets in Catford and Bromley.
