After months of turbulence that included the brand weighing a possible sale, Papa John’s has secured an investment from turnaround specialist Starboard Value LP.
Marred by uncertainty for the past several months, Papa John’s has struck a deal to kick off a brand turnaround. Activist hedge fund Starboard Value LP is making a $200 million strategic investment in the pizza chain with the option to add another $50 million through March 29, the brand announced Monday.
As part of the move, Starboard CEO Jeffrey Smith is set to take over as chairman of the Papa John’s board. Further, Steve Ritchie will remain Papa John’s CEO and will join the board.
According to an article in Forbes, Starboard is set to receive a new type of convertible stock at a premium equivalent to between 11 percent and 15 percent of outstanding shares.
An article in QSR Magazine noted Starboard is no stranger to brand turnarounds. In 2014, the company took control of casual-dining company Darden’s board to affect change in numerous operational capacities, most notably at Olive Garden. Within 18 months, the article noted, Darden’s stock rose 47 percent. Smith served as chairman of Darden’s board until April 2016.