Jack in the Box announces purchase of popular West Coast chain Del Taco in $575 million deal

Jack in the Box is buying Del Taco, the popular West Coast Mexican food chain, in a deal both companies say is worth approximately $575 million, including existing debt.

The nationwide burger chain announced on Monday the company will be paying $12.51 per share in cash to acquire Del Taco.

In recent decades, Jack in the Box has expanded nationwide, with over 2,200 locations in 21 states, as well as Guam. Del Taco, known for its mix of primarily Mexican cuisine with some American food options, can be found in 16 states, but there are only 600 locations. It is the second-largest Mexican fast-food chain behind Taco Bell.

Jack in the Box said the deal will result in locations having similar menu offerings that give guests options with a "unique variety, quality, innovation and value."

"We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family," Darin Harris, CEO of Jack in the Box, said in a statement. "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."

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Jack in the Box expects the purchase to be complete by March 2022, and eventually will lead to further expansion in the United States, with the goal of 4% annual unit growth by 2025. By the end of the 2023 fiscal year, the chain predicts it will receive benefits of up to $15 million through supply chain savings, digital efficiencies and knowledge-sharing initiatives.

“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," said John Cappasola Jr., president and CEO of Del Taco.

Follow Jordan Mendoza on Twitter: @jordan_mendoza5.

This article originally appeared on USA TODAY: Jack in the Box to purchase West Coast chain Del Taco for $575 million