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Legion Partners seeks board overhaul at Chefs’ Warehouse

2024.02.08 09:22


© Reuters.

LOS ANGELES – Legion Partners Asset Management, LLC, a big shareholder of The Chefs’ Warehouse, Inc. (NASDAQ:), has introduced the nomination of 4 new candidates to the corporate’s Board of Directors. This transfer is aimed at addressing what Legion Partners views as continual operational and share value underperformance at the specialty meals distributor.

The activist shareholder, which holds roughly 3.3% of the corporate’s excellent inventory, has expressed dissatisfaction with the present board’s observe file. According to Legion Partners, the prevailing board’s tenure, averaging over 9 years, has been marked by an absence of progress in enhancing profitability and strategic decision-making, significantly in relation to acquisitions.

Legion Partners’ nominees are touted as bringing a wealth of expertise in operations, finance, data programs, capital allocation, and strategic planning, which the funding supervisor believes are essential to steer Chefs’ Warehouse towards its full potential. The nominees embody Richard N. Peretz, a former CFO at UPS; Keith D. Rohland, a former Chief Information Officer at US Foods; Wendy M. Weinstein, a restaurant group board director and marketing consultant; and Christopher S. Kiper, a capital markets knowledgeable and co-founder of Legion Partners.

The Chefs’ Warehouse has struggled to fulfill its personal adjusted EBITDA margin targets through the years, with Legion Partners highlighting repeated failures to achieve the promised 7% margin. In distinction, the corporate’s steering midpoint for 2023 suggests a margin of 5.7%. Legion Partners criticizes the board for not holding administration accountable for these shortfalls and for overseeing what it describes as an undisciplined acquisition technique.

Legion Partners believes that with the election of its nominees and a refocused board, Chefs’ Warehouse may doubtlessly see its share value rise to greater than $85 and produce adjusted EBITDA of over $320 million by fiscal 2028. This would require reaching a 7% adjusted EBITDA margin, limiting acquisitions, and implementing a prudent capital spending program.

The shareholder’s evaluation of Chefs’ Warehouse’s efficiency relative to friends and indexes reveals a stark underperformance over one, three, and five-year intervals. The firm’s inventory has lagged behind not solely its core and different distribution friends but in addition the Index and the S&P Composite 1500 Food Distributors.

Legion Partners has expressed its intention to file a preliminary proxy assertion and accompanying supplies with the SEC to solicit votes for its slate of director nominees at the upcoming 2024 annual assembly of stockholders.

The data on this article is predicated on a press launch assertion from Legion Partners Asset Management, LLC.

This article was generated with the assist of AI and reviewed by an editor. For extra data see our T&C.

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