By Sam Boughedda
Jack in the Box will pay $12.51 per share in cash for Del Taco, the second largest Mexican food chain in the US. Shares of Del Taco closed at $7.53 on Friday — they currently trade at $12.40 following today's news, up 64%. Jack in the Box shares are down 6% since the announcement.
The company intends to finance the acquisition by issuing additional securitization notes. The transaction is expected to close in the first quarter of 2022.
Del Taco has approximately 602 locations in the U.S., mainly on the West Coast and Jack in the Box has 2,209, primarily in California. Combined, the companies will have over 2,800 locations, spanning 25 states.
Jack in the Box believes the deal will increase its earnings per share by mid-single-digit in the first year.
The company's CEO, Darin Harris, told investors: "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."
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.