Jack in the Box is buying Del Taco, the second-largest Mexican quick-serve restaurant in the United States, for $575 million. The deal was announced on Monday. Together, the two restaurants will have more than 2800 locations across 25 states and the deal is expected to allow Jack in the Box to tap into the growing Mexican food category while also create substantial opportunities for franchisee expansion across both brands.
Del Taco was founded in 1964 and serves more than three million guests each week across its approximately 600 locations in 16 states. Jack in the Box is a San Diego-based company and one of the nation's largest hamburger chains with more than 2200 restaurants in 21 states and Guam. The deal between Del Taco and Jack in the Box will include existing debt, per the company's press release.
"We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family," Darin Harris, CEO of Jack in the Box said in a statement. "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."
He continued, "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," John D. Cappasola, Jr. President and CEO of Del Taco said. "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."
He added, "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."
This deal between Jack and the Box and Del Taco comes approximately three years after Jack in the Box parted ways with another Mexican fast-casual chain, Qdoba. Jack in the Box had acquired Qdoba in 2003 and sold the brand in 2018.
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