US pet-food manufacturer Freshpet has ended a dispute with one of its largest shareholders Jana Partners following a cooperation settlement.
Timothy McLevish, one of the activist investor's director nominees, has been appointed to Freshpet’s board as part of the agreement. It brings an end to a feud with New York-based Jana Partners after the investor disclosed a near 10% stake in Freshpet in September and urged the company to consider a sale.
McLevish has served as chief financial officer at five public companies: Kraft Foods Group, Ingersoll-Rand Corp., Carrier Corp., Walgreen Boots Alliance and Mead Corp., according to a Freshpet statement today (21 August).
Along with McLevish, New Jersey-based Freshpet has also appointed Joseph Scalzo to its board of directors. Scalzo has been chief executive of Simply Good Foods Co. and WhiteWave Foods.
In a separate filing with the US Securities and Exchange Commission, Freshpet stated: “The cooperation agreement also contains customary mutual non-disparagement provisions.
“Each party’s obligations under the respective non-disparagement provisions of the cooperation agreement will terminate immediately upon any breach by the other party of its non-disparagement obligations.”
The pet-food maker added that Jana Partners will be subject to customary standstill restrictions including, among others, “with respect to acquiring beneficial ownership of more than 12.5% of the company’s shares”, proxy solicitation and related matters, and extraordinary transactions, including a sale of the company.
Just Food has contacted Freshpet to clarify Jana Partners’ shareholding position.
“We are pleased to reach a constructive agreement with Jana. The Freshpet business has tremendous momentum and this agreement will help position us to continue delivering the results our shareholders expect,” Billy Cyr, CEO of Freshpet, said in the company's statement.
“We also welcome Tim and Joe to our team and are confident they will be valued colleagues and members of our board as we work to continue capitalising on the significant opportunities ahead and creating value for shareholders.”
McLevish said: “I have long admired Freshpet’s business as it has transformed from a pet-food disruptor to a scaled industry leader.”
Scott Ostfeld, managing partner at Jana, added: “We commend Freshpet for the significant improvements in the business, team and board made over the past year. Joe Scalzo and Tim McLevish are proven executives with exceptional track records of driving shareholder value, and we are confident that the company is well-positioned to realise its full potential for shareholders. We look forward to supporting Freshpet’s board and management as it executes on its compelling growth strategy.”
Earlier this month, Freshpet reported net sales increased 25.6% to $183.3m for its second quarter and were up 26.1% year to date at $350.9m.
Net losses for the quarter narrowed to $17m from $20.6m, but for the year so far widened to $41.7m versus $38.1m.
