Subscribe to Entrepreneur for $5
Subscribe

Jack in the Box Buys Taco Chain for a Whopping $575 Million

Jack in the Box has acquired predominantly West Coast-based Del Taco in a deal that's expected to close early next year.

By

Originally rivals, two top fast-food chains will now become one in a brow-raisingly expensive acquisition.

SOPA Images | Getty Images

In a strategic taco-fueled move, fast-food chain Jack in the Box has acquired predominantly West Coast-based Del Taco in a deal that’s expected to close early next year.

Initial reports state Jack in the Box will acquire Del Taco for $575 million, or $12.51 per share in cash.

“I am excited to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family. We are two like-minded, challenger brands with outstanding growth opportunities,"  Jack in the Box CEO Darin Harris told Entrepreneur in a statement. "Del Taco has loyal and passionate guests, as well as a strong operating model and we’re excited to leverage our infrastructure, refranchising experience and development strategy to support Del Taco’s growth and expansion in conjunction with ours. I believe that Jack in the Box and Del Taco will benefit from a stronger financial model and greater scale, which will  allow us  to invest in digital and technology capabilities, as well as unit growth. This acquisition fits squarely within Jack in the Box’s strategic pillars and helps us create new opportunities for franchisees, team members and guests of both brands. We cannot wait to get started!"

The two brands have often been seen as rivals as they both not only offer tacos but also classic American fare such as burgers and fries. 

When the acquisition closes, the two chains will operate over 2,800 restaurant locations across 25 states, per a company report.

The Del Taco purchase will bolster Jack in the Box's drive-thru, mobile ordering and grab-and-go presence, as 99% of Del Taco locations have drive-thrus.

Both Jack in the Box and Del Taco franchise their locations.

“In recent years, we have uniquely positioned Del Taco as a leader in the growing Mexican QSR category, expanded our digital capabilities to enhance consumer convenience and focused on growing the brand through franchising, resulting in eight consecutive years of franchise same store sales growth and an accelerating new unit pipeline,” Del Taco president and CEO John D. Cappasola said in a statement. “We expect this transaction will provide Del Taco with the scale, complementary capabilities and opportunity to become even stronger partners to our franchisees and support their ability to drive substantial growth in our core and emerging markets.”

As of late Tuesday morning, Jack in the Box was up 5.36% from the same time yesterday. Del Taco was down around 0.28% in the same time period.

Emily Rella

Written By

Entrepreneur Staff

Emily Rella is a news writer at Entrepreneur.com. Previously, she was an editor at Verizon Media, covering entertainment, pop culture, lifestyle, entrepreneuership and business. She is a 2015 graduate of Boston College and a Ridgefield, CT native.