Hedge fund and activist investor in Papa John’s International, Inc. and Darden Restaurants, Inc. Starboard Value LLP filed on Tuesday for Starboard Value Acquisition Corp. to go public as a blank-check or special-purpose acquisition company with an IPO worth $300 million (30 million units priced at $10 each), according to an S-1 filing with the U.S. Securities and Exchange Commission. At the proposed price, Starboard SVAC would have a market value of $375 million.
Starboard is seeking to acquire a private company in the technology, healthcare, consumer, industrial, hospitality or entertainment industries and bring it public. According to SEC regulations, special-purpose acquisition companies have two years to make their acquisition.
Starboard Value CEO Jeffrey C. Smith will be chairman of the Starboard Value Acquisition Corp. board, Starboard executive M.J. McNulty will be CEO, and Kenneth R. Marlin will be the blank-check company’s chief financial officer. The company’s industry advisors also include former Dunkin Brands and Papa John’s CEO Nigel Travis, former CEO of Integrated Device Technology Greg Waters, and private equity professional Erin Russell, among others.
Starboard SVAC is seeking, according to the SEC filing, a company or companies that are prepared to go public, “are good businesses that are underperforming their potential” in otherwise stable industries, have a strong market position, are innovative, have significant expansion opportunities, and have strong management teams.
According to Reuters, Starboard Value LLP has secured more board seats at companies than any other hedge fund this year. Starboard is perhaps best known for replacing Darden Restaurants’ entire 12-person board in 2014 and implementing swift changes through a 294-page report, including a mandate that Olive Garden cooks begin salting their pasta water. In 2016, Starboard reduced their Darden holdings by 11%.
More recently, Papa John’s accepted a $200 million investment from Starboard in February 2019, and reserved a spot on their board for Jeffrey C. Smith. About 18 months after Papa John’s first announced Starboard’s investment, the pizza chain has undergone a significant turnaround effort with record-breaking sales for Q2 2020.
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