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The Dedham-based company, owner of Papa Gino and D'Angelo chains, confirmed Monday that it had closed about 95 restaurants, sought protection under Chapter 11 and reached an agreement to sell the business to a private equity firm .
PGHC Holdings Inc., the parent company of Papa Gino's and D'Angelo Grilled Sandwiches restaurants, was leaked in a statement following the brutal closure of dozens of restaurants over the weekend.
According to the statement, PGHC has reached an "agreement in principle" for the sale of the channel to Wynnchurch Capital. The terms were not disclosed.
According to the statement, "about 95 low-performing restaurants" were forced to close, but 178 combined restaurants, Papa Gino and D'Angelos, are still open.
"The company regrets having to close these restaurants but believes that a responsible approach is to concentrate resources on a core of the best restaurants," the statement said. "… As much as possible, PGHC hopes that some members of the team will move from closed restaurants to restaurants still in operation."
According to the statement, the proposed sale "will significantly strengthen the channel's financial resources, which will allow PGHC to remodel and modernize its 141 company-owned restaurants in Massachusetts, New Hampshire, Rhode Island and Connecticut;" additional restaurants throughout New England, and improve its online ordering capabilities in all restaurants. "
The company also announced that it was heading to a bankruptcy court.
"In order to complete the proposed sale, the company today filed protection claims under Chapter 11 of the US Bankruptcy Code," the statement said. "This process will allow PGHC to maintain its normal business operations in all of its restaurants with improved liquidity during the sale. As part of this process, as usual, PGHC will solicit competing offers to maximize the final value of the sale for both the company and its stakeholders. Under this process, the sale will require the court's approval. "
Corey Wendland, CFO of the company, also spoke.
"We are delighted to have reached an agreement that will ensure a long and prosperous future for these iconic restaurants in New England," Wendland said in the statement. "For some time, we have been pursuing a plan to strengthen our capital base and secure the capital needed to invest in our restaurants, while reducing our significant debt load. We are convinced that the agreement with Wynnchurch achieves all these objectives. "
He acknowledged that recent developments have been difficult for society.
"These were difficult decisions, but we think they were absolutely necessary to allow D'Angelo and Papa Gino grilled sandwiches to continue serving New England now and for years to come," Wendland said. "We look forward to serving our customers the pizzas and grilled sandwiches that they have loved for decades. If your nearest Papa Gino's or D'Angelo is closed, be aware that your favorite pizza or steak sandwich number 9 is waiting for you at a revitalized restaurant located nearby. "
You can contact Travis Andersen at [email protected]. Follow him on Twitter @TAGlobe.
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