Jack in the Box has today announced it has entered into a definitive agreement to acquire Del Taco Restaurants. Jack in the Box will purchase all of Del Taco’s shares at $12.51 per share, valuing the entire transaction at $575m. Jack in the Box estimates that the transaction values Del Taco at a synergy adjusted multiple of approximately 7.6x trailing twelve months adjusted EBITDA.
The Del Taco brand was founded in 1964 and serves three million guests every week across its 600 restaurants, dotted in and amongst 16 states. 99 per cent of the brand’s locations feature a drive-thru, aiding strong off-premises sales. When combined, the brands have 2,800 restaurants spanning 25 states and have similar customers, company culture and menu offerings.
“We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family. This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities,” said Darin Harris, CEO of Jack in the Box.
“Together, Jack in the Box and Del Taco will benefit from a stronger financial model, gaining greater scale to invest in digital and technology capabilities, and unit growth for both brands. This acquisition fits squarely in our strategic pillars and helps us create new opportunities for the franchisees, team members and guests of both brands.
“Del Taco has a loyal, passionate guest base and a strong operating model, and we believe that we can leverage our infrastructure, experience refranchising, and development strategy to support Del Taco’s growth plans and expand Del Taco’s footprint. We can’t wait to welcome the Del Taco team members and franchisees to the Jack family!”
“We are excited to have found a partner in Jack in the Box that shares our vision for the future and has the QSR expertise to further accelerate Del Taco’s growth,” said John D. Cappasola, Jr., president and CEO of Del Taco.
“In recent years, we have uniquely positioned Del Taco as a leader in the growing Mexican QSR category, expanded our digital capabilities to enhance consumer convenience and focused on growing the brand through franchising, resulting in eight consecutive years of franchise same-store sales growth and an accelerating new unit pipeline.
“We expect this transaction will provide Del Taco with the scale, complementary capabilities and opportunity to become even stronger partners to our franchisees and support their ability to drive substantial growth in our core and emerging markets. On behalf of Del Taco Restaurants, Inc. board of directors, we’re confident the agreement delivers immediate value to Del Taco shareholders and will greatly benefit our brand, team members, franchisees and loyal guests for many years to come.”