Del Taco shares rise nearly 66% upon news of the acquisition
Jack in the Box is purchasing Del Taco in a deal worth $575 million. The acquisition, which is expected to be completed by the beginning of next year, combines two of the nation’s well-known fast food franchises.
Jack in the Box has a variety of different food items, mainly serving American-style dishes such as hamburgers, while Del Taco is known for its Mexican food offerings like tacos and quesadillas.
The pairing will give the brands more than 2,800 locations across 25 states, and, according to Jack in the Box CEO Darin Harris, will put them in a better position in the quick-service restaurant market.
“Joining forces will provide additional resources to drive innovation to create more unique, innovative menu items and exceptional guest experiences,” Harris said during a Monday analyst call discussing the deal, reports CNN. “This will allow Jack and Del Taco to better engage with their existing guests and reach new ones.”
Shares of Del Taco rose almost 66% following reports of its acquisition, while Jack in the Box dipped slightly, losing around 4%, reports CNN.
Jack in the Box previously purchased a separate Mexican fast-casual restaurant chain, Qdoba, back in 2003, however it ended up closing the deal with the brand in 2017 do to report declines in sales.
Harris said in a statement announcing the acquisition that he is “thrilled” to welcome Del Taco, which he referred to as a “proven regional winner” into the Jack in the Box family.
“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,” Harris said. “This acquisition fits squarely in our strategic pillars and helps us create new opportunities for the franchisees, team members and guests of both brands.”