Jack in the Box splashes the business world with a big move Monday, purchasing Del Taco with a deal worth up to $575 million.
Jack in the Box is expected to pay $12.51 per share through cash transactions for the purchase of the franchise.
Stock availability for the Mexican fast-food chain closed on Friday, with each share closing at $7.63. The burger franchise says they plan on financing the purchase by accommodating extra securitization notes.
“This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities,” Jack in the Box CEO Dareen Harris stated. “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,” he added.
Del Taco had up to 600 locations spread across 16 states. With this acquisition, Jack in the Box will now have a total of 2,800 restaurants across 25 different states with both brands under its belt. The purchase is set to close as of the first quarter of 2022.
This isn’t the first time Jack in the Box has made a big time business move involving a Mexican restaurant brand.
This big move comes four years after Jack in the Box sold Mexican food restaurant QDOBA to Apollo Global Management, a private equity firm, back in 2017, after the burrito joint had been believed to have lost momentum.
This acquisition comes roughly one year after Jack in the Box presented a new management with Darin Harris at the helm as Chief Executive, who says that the company strives to become as innovative as possible going forward.
“We are a management team that’s focused on aggressively creating shareholder value,” Harris said. “We are taking action to create value now as we prepare for future restaurant growth.”