PGHC Holdings, Inc. Announces Stalking Horse Sale Agreement with Wynnchurch Capital

DEDHAM, Mass., Nov. 5, 2018 /PRNewswire/ -- PGHC Holdings, Inc. ("PGHC"), the parent company of the popular New England restaurant chains Papa Gino's Pizzeria and D'Angelo Grilled Sandwiches, today announced it has reached an agreement in principle to sell the company to a Wynnchurch Capital portfolio company.

The proposed transaction would significantly strengthen the chains' financial resources, allowing PGHC to remodel and modernize their 141 company-owned restaurants in Massachusetts, New Hampshire, Rhode Island, and Connecticut; open additional restaurants throughout New England; and enhance its online ordering capabilities at all restaurants.

"We are pleased to have reached an agreement that will ensure a long and prosperous future for these iconic New England restaurants," said Corey Wendland, Chief Financial Officer. "For some time, we have been pursuing a plan to strengthen our financial footing and secure capital for investment in our restaurants, while also addressing our significant debt load. We are confident that the agreement with Wynnchurch achieves all of those goals."

Wynnchurch is a leading middle-market private equity investment firm with $2.2 billion of committed capital under management. Wynnchurch has a long history of partnering with middle market companies like PGHC in the United States and Canada that possess the potential for substantial growth and profit improvement.

In order to effectively and efficiently complete the proposed sale, the company today filed petitions for protection under Chapter 11 of the U.S. Bankruptcy Code. This proceeding will ensure PGHC can maintain normal business operations at all of its restaurants with improved liquidity as it pursues the sale. As part of this process, and as is customary, PGHC will solicit competing offers to maximize the ultimate value of the sale, for both the company and its stakeholders. Under this process, the sale will require court approval.

Importantly, PGHC generates positive cash-flow from operations and has requested court approval for debtor-in-possession financing from Wynnchurch to provide additional liquidity during the sale process. PGHC will continue to pay its network of suppliers on normal terms and schedules for goods and services received during the Chapter 11 process and will continue to honor its customer rewards and gift cards programs.

"We recognize we have a responsibility to not only provide for the future of these businesses, for our valued team members and guests, but to also ensure our current debt structure is sufficiently addressed," Mr. Wendland said. "We believe this process will allow us to do just that and build an even better company for all of our team members by creating an atmosphere that team members will be proud to serve in. PGHC will continue its long tradition of hosting birthday parties, team celebrations and other neighborhood events as well as serving delicious favorites like Papa Gino's famous 3-Cheese Pizza or a D'Angelo Steak & Cheese."

PGHC has already taken important steps to address the debt structure and focus its financial resources. Following a careful review and analysis, on November 4, 2018, PGHC closed approximately 95 under-performing restaurants. The company regrets having to close these restaurants but believes focusing resources on a core of best-performing restaurants is the responsible approach.

One hundred Papa Gino's restaurants and 78 D'Angelo Grilled Sandwiches restaurants, including franchise locations, continue to operate and remain open for business. Where possible, PGHC hopes to move certain team members from closed restaurants to restaurants that continue to operate.

"These were hard decisions but decisions we believe were absolutely necessary to allow Papa Gino's and D'Angelo Grilled Sandwiches to continue serving New England now and for years to come," Mr. Wendland said. "We look forward to serving our guests the pizza and grilled sandwiches they have come to love over many decades. If your nearest Papa Gino's or D'Angelo has closed, be assured that your favorite pizza or Steak Number 9 sandwich awaits you at a re-energized restaurant not too far away."

For more information on the sale process, please visit PGHCsaletransaction.com or call 1.800.390.2649.

About Papa Gino's

Founded in 1961, Papa Gino's Pizzeria is a 57-year old New England staple, proudly serving handmade artisanal pizzas using recipes the founding family brought over from Italy in the 1930s. From a single restaurant in East Boston, Papa Gino's has expanded over the years and now has 100 restaurants in Massachusetts, Rhode Island, New Hampshire, and Connecticut. It is the official pizza of the New England Patriots of the NFL and the New England Revolution of Major League Soccer.

About D'Angelo Grilled Sandwiches

With its roots stretching back to 1967, D'Angelo Grilled Sandwiches has been serving generations of hungry New Englanders. Now with 78 restaurants the chain, started in Dedham, Mass., was originally called Ma Riva's Sub Shop. The name was changed in the Seventies and the menu expanded but each restaurant remains proud to serve its guests the same highest-quality meats and breads that first won over fans more than 50 years ago.

SOURCE PGHC Holdings, Inc.

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