Jack in the Box To Acquire Del Taco for $575 Million
The brands expect the move will allow them to accelerate growth plans, invest in digital and technology capabilities and increase profitability.
Jack in the Box once again is stepping into the Mexican QSR category as it announced today it will acquire Del Taco for $575 million.
Jack in the Box says the purchase will bring together two “challenger brands” to create opportunities to scale both chains. With a stronger financial model, the brands also will invest in digital and technology capabilities, says Jack in the Box’s CEO Darin Harris, and work to develop new menu offerings while increasing overall profitability.
“This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities … This acquisition fits squarely in our strategic pillars and helps us create new opportunities for the franchisees, team members and guests of both brands,” says Harris.
Through the acquisition, Jack in the Box says it will benefit from Del Taco’s “strong operations, construction and development expertise” to drive expansion and support its goal of 4% annual unit growth by 2025. And, by leveraging Jack in the Box’s “broader footprint, refranchising experience and digital capabilities,” the combined company expects to accelerate growth at both brands in existing and new markets.
Jack in the Box also expects the deal to result in savings to the tune of $15 million by the end of fiscal year 2023. The savings would come largely through procurement and supply chain savings, technology and digital efficiencies and other financial benefits, says Jack in the Box.
The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including Del Taco shareholder approval and regulatory approvals.
Founded in 1964, Del Taco has approximately 600 restaurants in 16 states.
Jack in the Box previously owned the quick-service Mexican restaurant brand Qdoba. It acquired the chain in 2003 when it had just 85 locations and sold it to Apollo Global Management in 2018 for approximately $305 million.
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