By Sam Boughedda
Investing.com — Fast food restaurant chain Jack In The Box Inc (NASDAQ:JACK) will acquire Del Taco Restaurants Inc (NASDAQ:TACO) in a deal worth around $575 million, the companies said Monday.
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."