Aramark has inked a deal with New York-based investment fund Mantle Ridge to overhaul its board and appoint a new CEO, nearly two months after the activist investor disclosed a 20% stake in the U.S. food services company.
Aramark has agreed to add five directors to its board with immediate effect, including Mantle Ridge founder and CEO Paul Hilal, with a sixth to be nominated for election at the firm’s 2020 annual meeting. The company also appointed John Zillmer as its new chief executive officer and Hilal as vice-chairman of the board.
The other new directors who joined Aramark are Susan Cameron, Art Winkleblack, and Karen King. Greg Creed is the sixth director who will stand for election at the firm’s 2020 annual meeting, which will be held by January 29, 2020.
News surfaced in May that Mantle Ridge was planning to advance a buyout offer for Aramark. Reuters reported that the activist was exploring forming a consortium with private equity firms and sovereign wealth funds to bid for the company while engaging with banks about raising debt financing for a potential transaction.
In late August, just 10 days after Mantle Ridge said it spent $900 million for a 20% stake in the food services firm, CEO and Chair Eric Foss abruptly announced his retirement.
Directors Pierre-Olivier Beckers-Vieujant, Lisa Bisaccia, Patricia Morrison, and John Quelch have stepped down from the board, the regulatory filing noted.
Aramark increased the size of its board to 10 seats to accommodate the new entries while agreeing to further add an 11th seat following the 2020 annual meeting.
The company also agreed to propose an amendment to its bylaws that will allow shareholders owning 15% or more of its stock to call a special meeting. According to Activist Insight Governance, shareholders planning to call a special meeting must own at least 50% of the firm’s stock.
Zillmer had previously served in various positions at Aramark during an 18-year tenure that ended in 2004. After leaving Aramark, Zillmer served as CEO of Allied Waste Industries and Univar Solutions.
“John Zillmer is an outstanding leader with a proven record of accelerating business performance and fostering a strong corporate culture, Chair Steve Sadove said on Monday. “We appreciate Mantle Ridge’s thoughtful approach to the long-term success of Aramark and welcome this opportunity to partner with Paul Hilal, a true owner-steward,” he added.
Shares in Aramark traded up 3.1% at 10 a.m. EDT on Monday.