BY: GEORGE LURIE, San Diego Business Journal
APRIL 3, 2023
San Diego-based Jack in the Box Inc. has completed its $585 million acquisition of Del Taco Restaurants, Inc. With the close of the deal last month, analysts believe Jack in the Box and Del Taco are now positioned as stronger QSR players with greater scale – and a clear runway to pursue further growth and profitability.
The merger, according to industry insiders, appears to be a good fit for both companies, which boast similar guest profiles, menu offerings and company cultures. The deal also could unlock significant opportunities for company franchisees and investors.
Darin Harris, CEO of Jack in the Box, said completion of the merger “marks an important milestone in our company’s history as we officially welcome Del Taco to the Jack in the Box family.” Harris, an industry veteran, became Jack in the Box’s chief executive in June 2020. Previously, he served as CEO of The Regus Group and CiCi’s Pizza, both Dallas, Texas-based companies.
“We have ambitious growth plans for our combined company, and we are excited for the many exciting opportunities ahead,” Harris said following completion of the blockbuster merger. “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.”
John D. Cappasola Jr., president and CEO of Del Taco, agreed. “We’re extremely proud to join forces with the Jack in the Box brand and are excited to have found a partner that shares a similar culture and passion for what we do,” Cappasola, Jr. said. “We expect this transaction will significantly strengthen and grow our beloved brands.”
Under the terms of the agreement and merger plan, Del Taco stockholders received $12.51 per share in cash. Del Taco’s common stock ceased trading in mid-March after the deal was finalized.
Jack in the Box shares have been on a tear in 2023, rising more than 20% to trade near $85. Over the past year, the stock has been trading as low as $55 and as high as $95.
In March, Jack in the Box reported Q1 earnings, which topped analyst estimates, with same-store sales increasing 7.8% at franchise-operated locations and 12.6% at company-operated locations.
Harris said company-operated restaurants experienced growth in both average check and traffic while franchise restaurants had growth in average check, partially offset by a decline in traffic.
“We are very pleased with our first quarter results, and enthusiastic about the momentum we are building for 2023 and our ongoing transformation story,” Harris said.
Jack in the Box was founded in San Diego on February 21, 1951 by Robert O. Peterson. Today, with more than 2,200 restaurants in 21 states and Guam, the popular hamburger chain is among the largest so-called QSR (Quick Service Restaurant) players in the industry.
Founded in 1964, today Del Taco serves more than three million guests each week at its approximately 600 restaurants across 16 states. The chain offers a unique variety of both Mexican and American favorites from burritos and tacos to burgers and fries, prepared fresh in every restaurant’s working kitchen.
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