Papa John’s will use 50% of the investment to repay its debt and the remaining to invest in the brand. Credit: Pam Lane.

Investment adviser Starboard Value is set to make a $200m strategic investment in American pizza chain Papa John’s International.

As part of a securities purchase agreement between the parties, Starboard will acquire $200m worth newly designated Series B convertible preferred stock of Papa John’s.

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The agreement also covers an additional $50m investment to be made in the pizza chain through 29 March this year.

Papa John’s will use approximately 50% of the investment to repay its debt and the remaining to invest in five strategic priorities including people, brand, value/product, technology and unit economics.

Papa John’s Special Committee member Olivia Kirtley said: “Our agreement with Starboard concludes a comprehensive strategic review conducted over the past five months to better position Papa John’s for growth, improve the company’s financial performance and serve the best interests of our stakeholders.

"This transaction provides the company with financial resources and strong and experienced directors on the board in order to position the company for success over the long-term."

“This transaction provides the company with financial resources and strong and experienced directors on the board in order to position the company for success over the long-term.

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“We believe we have found terrific partners to advance Papa John’s strategy, especially given their record of reinvigorating and growing premier restaurant and consumer brand companies.”

In addition, Papa John’s board of directors have appointed two new independent directors from Starboard including its CEO Jeffrey C. Smith and Pinnacle Entertainment CEO Anthony M Sanfilippo. The pizza chain has also appointed Smith as the new chairman of its board.

Both directors will support the company’s strategy to capitalise on its differentiated market position, as well as help to further establish the brand.

Furthermore, the pizza chain has appointed its president and CEO Steve Ritchie to the board.

These appointments will expand the board to nine directors, seven of whom are independent.