Garden Investments, a new firm started by one of Trian Fund Management’s co-founders, has built an activist position in kitchen-equipment maker Middleby and plans to push for changes that could boost the sluggish stock, according to people familiar with the matter.

The details

Garden Investments, founded by Ed Garden, has accumulated an almost 5% stake in Middleby, and is looking to continue buying more, the people said. It is the firm’s first investment.

Elgin, Ill.-based Middleby had a market value of almost $8 billion as of Thursday. Its share price has lagged well behind the broader market over the past three-year and five-year periods.

Middleby designs and manufactures cooking equipment for the commercial, residential, and industrial food-service markets. Its products are often seen in the kitchens at Chipotle, McDonald’s, Wendy’s, Starbucks and other restaurant chains. For instance, it owns the primary maker of ice cream machines used at McDonald’s. Its residential unit owns high-end appliance brands including Viking and La Cornue.

Middleby shares have lagged behind as the restaurant industry has faced lower traffic and higher food costs. The company has said customers are delaying investments in their facilities and closing more locations, weighing on its results.

The company has been active in pursuing mergers and acquisitions for more equipment makers, including chips and tortillas, baked goods and ice cream.

Garden Investments is planning to push a renewed focus on Middleby’s core commercial food service segment, while reviewing other parts of the business, including its residential segment, the people said.

Garden Investments also will seek board seats and a different capital allocation approach, the people said.

The context

Ed Garden departed Trian in June 2023 to establish his own family-office firm, The Wall Street Journal reported. He later officially launched Garden Investments alongside his former colleague Chad Fauser.

Garden co-founded Trian in 2005 with Nelson Peltz and Peter May. He was their chief investment officer and served on a number of boards over the years including Wendy’s. He still has a seat at GE Aerospace, a remainder of the once mighty conglomerate General Electric where Trian had invested and then helped break it apart after struggles.