A new Jack in the Box Restaurant in Texas. Courtesy of the company

San Diego-based Jack in the Box announced Monday it would buy Del Taco Restaurants for $455.3 million, as it looks to expand its customer base and take advantage of the Mexican food chain’s drive-thru foothold.

Under the deal, Jack in the Box will pay $12.51 in cash for each Del Taco share, which is a premium of over 66% to its closing price on Friday. The total value of the deal, including debt, is about $575 million.

Jack in the Box, which would then have over 2,800 restaurants spanning 25 states, said the deal would help the chain beef up its off-restaurant premises sales. About 99% of Del Taco restaurants feature a drive-thru.

“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,” Harris added.

The San Diego company said it expects the deal to immediately add to its earnings, adding the combined company would realize about $15 million in savings by the end of fiscal 2023 through supply chain and digital efficiencies.

BofA Securities is serving as the financial adviser to Jack in the Box, while Piper Sandler & Co is advising Del Taco.

Updated at 5:19 p.m. December 6, 2021

City News Service contributed to this article.

Show comments