Jack in the Box to Buy Del Taco
Jack in the Box Inc. has struck a deal to buy Del Taco Restaurants Inc.
The companies announced that Jack in the Box will buy the Mexican QSR chain for $12.51 per share in cash in a transaction valued at approximately $575 million, including existing debt.
Founded in 1964, Del Taco serves more than three million guests each week at its approximately 600 restaurants across 16 states. A whopping 99% of Del Taco restaurants feature a drive-thru, helping to achieve strong off-premise sales and a diversified daypart mix. Jack in the Box and Del Taco will have more than 2,800 restaurants spanning 25 states with similar guest profiles, menu offerings and company cultures – both priding themselves on serving guests with unique variety, quality, innovation and value. Together, the companies will create a stronger QSR player with greater scale and the ability to enhance the guest experience while pursuing profitable growth.
“We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family,” said Darin Harris, CEO of Jack in the Box, which operates more than 2,200 restaurants in 21 states and Guam. “This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities. 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.”
[75% of consumers prefer to order delivery direct from the restaurant, according to HT's 2021 Customer Engagement Technology Study.]
Major Deals of the Year
Jack in the Box's deal to buy Del Taco follows on the heels of other high profile IPOs and acquisitions in the restaurant and restaurant tech space. Best known as a breakfast restaurant, First Watch filed to go public. In September, SpotOn raised $300 million that will be used to acquire the digital and mobile commerce platform Appetize. HungerRush plans to acquire Menufy. Plate IQ raised$160M. On the M&A front, Punchh was acquired by ParTechnology and Restaurant365 Bought Compeat, and Toast filed for an $100M IPO. Online ordering company Olo held its IPO in March.
John D. Cappasola, Jr., President and CEO of Del Taco, said, the brand has expanded its 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.”
Jack in the Box and Del Taco say they will also benefit from sharing best practices and the opportunity to strengthen guest loyalty and reach new guests. As a combined QSR player, Jack in the Box and Del Taco plan to expand their footprint and continue to drive innovation at both brands to create more unique, innovative menus and exceptional guest experiences.