Jack in the Box selling Del Taco for $115 million
The second largest Mexican-American quick-service restaurant chain is being sold for less than half of what its current owner paid.
Jack in the Box Inc. has entered into a definitive agreement to sell Del Taco Holdings Inc., which operates and franchises more than 550 Del Taco restaurants, to restaurant franchisee Yadav Enterprises Inc. for $115 million in cash. The deal is expected to close by January.
Yadav has a portfolio that includes more than 310 franchise restaurants across several banners. It also owns and operates fast-casual Tex-Mex chain Taco Cabana.
Jack in the Box acquired Del Taco in 2022 for approximately $585 million. The burger giant in April said it was exploring the sale of Del as part of a plan to strengthen its balance sheet and return Jack in the Box to a simpler, “asset-light” business model. The plan also calls for closing 150 to 200 underperforming restaurant.
“This divestiture is an important step in returning to simplicity, and we look forward to focusing on our core Jack in the Box brand,” said Lance Tucker, CEO of Jack in the Box. “After a robust process, we are confident we have entered into a transaction with the right steward for Del Taco in its next chapter of evolution.”
Jack in the Box expects to use the net cash proceeds after taxes and transaction costs to retire debt within its securitization structure.
Headquartered in San Diego, Calif., Jack in the Box Inc. operates and franchises 2,162 namesake restaurants across 22 states and 550 Del Taco 550 restaurants across 18 states.
Yadav Enterprises Inc. operates more than 310 franchise restaurants including Jack in the Box, Denny’s, and TGI Friday’s, and owns the Taco Cabana brand, a fast-casual, Tex-Mex restaurant chain consisting of 150 locations, and Nick the Greek, a fast-casual Greek restaurant chain consisting of 90 locations.
BofA Securities Inc. is serving as exclusive financial advisor to Jack in the Box, and Sullivan & Cromwell LLP is serving as its legal counsel in connection with this transaction. Yadav Enterprises Inc. is represented in this transaction by its General Counsel Steven M. Kries and advised by Baker Tilly.
