Jack in the Box to acquire Del Taco, combining two challenger brands to create substantial opportunities for growth and increased profitability

Picture credit: Bloomberg.com

• Brings Together Two Brands with Complementary Cultures, Guest Profiles, Operating Models and Market Opportunities

• True QSR in the Attractive and Growing Mexican Category with a Leading Brand

• Creates Critical Economies of Scale and Reinforces Unit Growth Strategies for Both Brands Nationwide

• Financially Compelling Transaction with Meaningful Synergy Opportunities is Expected to be Immediately Accretive to Jack in the Box EPS

SAN DIEGO & LAKE FOREST, Calif. –December 6, 2021 – Jack in the Box Inc. (NASDAQ: JACK), one of the nation’s leading QSR chains, and Del Taco Restaurants, Inc. (NASDAQ: TACO), the nation’s second largest Mexican QSR chain by number of restaurants, today announced that the companies have entered into a definitive agreement pursuant to which Jack in the Box will acquire Del Taco for $12.51 per share in cash in a transaction valued at approximately $575 million, including existing debt. While this price per share offers an attractive premium to Del Taco shareholders, Jack in the Box estimates that the transaction values Del Taco at a synergy adjusted multiple of approximately 7.6x trailing twelve months Adjusted EBITDA.

Founded in 1964, Del Taco serves more than three million guests each week at its approximately 600 restaurants across 16 states. 99% of Del Taco restaurants feature a drive-thru, helping to achieve strong off-premise sales and a diversified daypart mix. Jack in the Box and Del Taco will have more than 2,800 restaurants spanning 25 states with similar guest profiles, menu offerings and company cultures – both priding themselves on serving guests with unique variety, quality, innovation and value. Together, the companies will create a stronger QSR player with greater scale and the ability to enhance the guest experience while pursuing profitable growth.

“We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family,” said Darin Harris, CEO of Jack in the Box. “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.”

Mr. Harris 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!”

David Beshay, a Jack in the Box franchisee and operator of 210+ restaurants, added, “I couldn’t be happier about the opportunity that this transaction offers to the franchisees of these two amazing brands. I believe the Del Taco brand will fit hand in glove with ours, and further enhance the strong franchise and guest-focused culture we have worked so hard to develop at Jack in the Box. We are excited about the potential to open Del Taco restaurants, helping the company expand these two beloved brands.”