Noodles & Company today announced a $31.5 million private placement of Class A common stock to Mill Road Capital II, L.P. on March 13, 2017, to further strengthen the Company’s balance sheet and fund strategic initiatives.

The Private Placement is expected to satisfy the Company’s previously announced intention to further strengthen its balance sheet following the February 2017 private placement sale of preferred stock and warrants to L Catterton. Accordingly, the Company no longer intends to pursue a public offering of its Class A common stock.

Under the Private Placement, the Company has agreed to issue to Mill Road 8,873,240 shares of Class A common stock at a price per share of $3.55, which is equal to the closing sale price for the Company’s Class A common stock on March 10, 2017. The transaction is expected to close in early April 2017.

Dave Boennighausen, Chief Financial Officer and interim Chief Executive Officer of Noodles & Company, noted, “We are excited to announce this investment by Mill Road Capital, which has a strong record of investments in consumer brands, including in the restaurant industry.” Boennighausen continued, “We are pleased to complete our plans to strengthen our balance sheet, positioning us well to heighten our focus on building the Noodles & Company brand and to make the right strategic investments for the future.”

Thomas Lynch, Mill Road’s Founder, stated, “This significant investment demonstrates our confidence in the management team and the strategic plan the Company has outlined. We believe Noodles & Company has a bright future ahead of it and look forward to assisting the Company in this transformative year and beyond.”

The proceeds of the Private Placement will be used, in conjunction with proceeds received from the previously announced private placement to L Catterton and cash flow from operations, to satisfy liabilities associated with the Company’s plan to close underperforming restaurants, to satisfy liabilities arising from the data breach that occurred in 2016 and to fund, in part, capital expenditures related to investments in the remaining company-owned restaurants. Jefferies LLC acted as placement agent on the Private Placement.

March 13, 2017