Chicago-Based Levy To Buy Del Taco For $500 Million

Levy Acquisition Corp., the merger-minded offshoot of Chicago restaurateur Larry Levy, plans to acquire Del Taco Inc. for about $500 million, including debt, from its private equity owners. The country’s No. 2 quick-serve Mexican chain will be renamed Del Taco Restaurants.

According to the agreement, Levy’s family and other investors will inject $120 million in the equity of Del Taco. Levy will become chairman of Del Taco’s board of directors and will partner with management to oversee the company’s growth. Levy is the co-founder of Levy Restaurants, which operates concession stands at arenas, including Wrigley Field and U.S. Cellular Park, as well as several Chicago restaurants. He established Levy Acquisition in 2013 and raised $150 million in an IPO that year, with the goal of acquiring a restaurant chain.

“We have been searching to acquire a growth restaurant brand for over a year, and when we focused on the iconic Del Taco, we knew it was perfect,” Levy said in a statement. “To me, it offers the quality and freshness found at fast-casual concepts but with an average check price that is more typical of a QSR.”

Lake Forest, Calif.-based Del Taco, founded in 1964, offers tacos and burritos, as well as burgers and fries. The chain currently operates 547 locations in 16 states, mostly in the Southwest. Del Taco owns more than 300 of the locations; franchisees operate the rest.

Del Taco’s management team, led by CEO Paul Murphy, plans to remain with the company. The deal is expected to close in June.