San Diego-based Jack in the Box announced Tuesday it is selling its 700-unit Qdoba restaurant chain for $305 million in cash to a New York investment firm.
Apollo Global Management, which describes itself as a “value-oriented” investor “with significant distressed expertise,” will acquire the Mexican fast-food chain, which which has been struggling with lower sales.
“Our board of directors has determined that the sale of Qdoba is the best alternative for enhancing shareholder value and is consistent with the company’s desire to transition to a less capital-intensive business model,” said Lenny Comma, chairman and chief executive officer of Jack in the Box. “Keith Guilbault, Qdoba brand president, has assembled a talented and experienced management team, and we wish them, the franchisees and all of the brand employees continued success.”
The transaction is expected to close by April and Jack in the Box plans to use the proceeds to retire outstanding debt.
When the company acquired Qdoba in 2003, the chain had 85 locations in 16 states, with $65 million in annual sales. Now it’s the second largest fast-casual Mexican food brand with more than 700 locations in 47 states, the District of Columbia and Canada, and annual sales of more than $820 million .
“We are extremely excited to be acquiring Qdoba and look forward to working with the management team, employees and franchisees to continue building the Qdoba brand,” said Apollo Senior Partner Lance Milken. “We are firmly committed to Qdoba’s continued growth as a leading fast-casual restaurant operator.”
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