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Del Taco to be acquired in merger and go public, may expand locations nationwide

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XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Nov 5, 2005
52,177
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http://nrn.com/mergers-acquisitions/levy-acquisition-corp-acquire-del-taco

Del Taco Holdings Inc. will merge with a “blank check” company led by Chicago restaurateur Larry Levy and his family, the company said Thursday, in a deal that values the Mexican quick-service chain at $500 million.

The deal will take Del Taco public through a reverse merger with Levy’s company, Levy Acquisition Corp., or LAC, which currently trades on the Nasdaq stock exchange. LAC will change its name to Del Taco Restaurants Inc. after the merger closes, which is expected in June.

LAC, along with the Levy Family and other investors, will pay a total of $305 million to fund the deal and recapitalize the chain. That includes $150 million from LAC, plus an additional $120 million from the Levy family and other investors to recapitalize the company, and $35 million at closing from additional private investors to fund the cash part of the deal.


After the deal closes, Levy will become chairman of the Del Taco board of directors and will partner with management to oversee the company’s growth.

“We are buying an iconic restaurant company at a very good price,” Levy said in a press conference on Thursday. “We wanted an established business with strong profit, strong cash flows and improving comparable store sales, and ample opportunities for growth. More important, we were looking for one with an experienced management team. After over a year, we found a company in the center of the bull’s-eye.”

The chain currently has about 547 locations in 16 states, largely in the Southwest. Del Taco owns more than 300 locations, while franchisees operate the rest. The chain is the second-largest quick-service Mexican chain in the country.

Del Taco has been exploring a sale for months. The chain is owned by a consortium of private-equity firms, including Goldman Sachs, Charlesbank Capital Partners and Leonard Green & Partners. The deal came shortly after the company completed a debt refinancing led by GE Capital.

Del Taco’s management team, led by CEO Paul Murphy, is expected to remain with the company.

“We are very excited to be partnering with Larry Levy and LAC,” Murphy said in a statement. He added that the chain has had 10 straight quarters of same-store sales growth, as well as improving margins and unit volumes.

LAC is known as a “blank check” company, which is a shell corporation that sells stock to public investors with the purpose of acquiring an unnamed company. Such companies are highly speculative, and act similarly to a publicly traded private-equity firm.

After a merger, the acquired company then goes public and assumes the blank check company’s stock symbol.

Del Taco’s $558 million valuation calculates to just less than nine times estimated 2015 adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, the company said.

Murphy said during the conference call that the chain is poised to reaccelerate unit growth. He said the company has the potential to expand to 2,000 locations in the U.S., and has proven its ability to attract sales outside of core markets. He also suggested that there are “opportunities to refranchise stores or markets to accelerate growth.”

“We’re poised to grow from a West Coast icon with a rich history to a strong national brand,” he said.


Del Taco executives said during the conference call that the chain is taking a premium positioning at a low price point. The company has a $6.49 average check, less than $7.20 at Taco Bell and $10.17 at Chipotle. The chain has a tiered menu strategy and an ad campaign highlighting its fresh ingredients, with a tagline “Unfreshing Believable,” to drive traffic.

In addition, most of the locations have been remodeled, and the company has been focused on improving service in part by copying best practices employed by the top-performing concepts.
 

Parallax

best seen in the classic "Shadow of the Beast"
Sep 11, 2005
31,446
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now everyone can be aware of the bowel poison that is del taco

except for their breakfast menu. thats dope
 

grandjedi6

Master of the Google Search
Feb 22, 2007
37,667
0
0
Isn't Del Taco the worst chain Mexican restaurant? It's like the White Castle of Mexican food. Not looking forward to them being everywhere.
 

water_wendi

Water is not wet!
Oct 8, 2006
19,066
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The best thing on Del Taco's regular menu are the cheeseburgers, funnily enough.

Yea their burgers are really good. Their fries are also probably the best outside of the major fast food chains.

edit: also i doubt very seriously anyone thinks fast food of any type is 100% authentic to their ethnic origins. Chinese food might be the exception to that tho lol
 

Valnen

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Aug 4, 2009
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now everyone can be aware of the bowel poison that is del taco

Neogaf has digestive issues. Never had any problems eating Del Taco. Taco Tuesday is fucking awesome, by the way. The classic tacos are better than the tacos from Taco Bell, though that admittedly isn't saying much.
 

antonz

Member
May 12, 2010
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Del Taco is awesome. Used to be my go to place when I got off work at 4 am. Get some awesome breakfast burritos and breakfast quesadillas
 

Weetrick

Member
Feb 8, 2009
2,405
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660
Maybe it's because I live where there are Mexican restaurants on every corner, but the thought of going to Del Taco would never cross my mind.
 

rude

Banned
Aug 25, 2014
2,150
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You guys realize this isn't real mexican food right? Ugh, the prevalence of places like this really disgusts me. Why don't people just go to their town's hole in the wall?
 

water_wendi

Water is not wet!
Oct 8, 2006
19,066
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You guys realize this isn't real mexican food right? Ugh, the prevalence of places like this really disgusts me. Why don't people just go to their town's hole in the wall?

Because i cant get food in under 2 minutes without leaving my car when going between jobs?
 

antonz

Member
May 12, 2010
22,354
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You guys realize this isn't real mexican food right? Ugh, the prevalence of places like this really disgusts me. Why don't people just go to their town's hole in the wall?

Its about as Mexican as most American Mexican food which means very little authenticity to it.
 

Parallax

best seen in the classic "Shadow of the Beast"
Sep 11, 2005
31,446
1
1,255
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los angeles
Neogaf has digestive issues. Never had any problems eating Del Taco. Taco Tuesday is fucking awesome, by the way. The classic tacos are better than the tacos from Taco Bell, though that admittedly isn't saying much.

normally i agree, but del taco, and little ceasars do create stomach landmines. and considering i can eat large quantities of many items, im gonna say its the food there

You guys realize this isn't real mexican food right? Ugh, the prevalence of places like this really disgusts me. Why don't people just go to their town's hole in the wall?

how many places have hole in the wall mexican joints? that seems like a major city thing
 

Weetrick

Member
Feb 8, 2009
2,405
0
660
You guys realize this isn't real mexican food right? Ugh, the prevalence of places like this really disgusts me. Why don't people just go to their town's hole in the wall?

I'm sure people realize this. I like crappy "Happy Wok" style Chinese food but I realize it's not authentic. It still has its own appeal. That being said, Del Taco is nasty.
 

SoulUnison

Banned
Dec 4, 2011
9,090
619
840
Pacific Northwest, United States
now everyone can be aware of the bowel poison that is del taco

except for their breakfast menu. thats dope

You should probably eat more fiber, or get your incredibly delicate digestive system checked by a doctor.
If you can't eat a reasonable amount of fast food without experiencing gastric distress, the problem's with you, not the restaurant.

Do you honestly think a nationwide chain would still be in business if it caused even 10% of its customers to get sick?

normally i agree, but... ...considering i can eat large quantities of many items, im gonna say its the food there

Maybe you should eat reasonable serving sizes and regular portions.
"Oh no, I binged on an excessive quantity of processed convenience food that should be eaten sparingly by definition, but it's the restaurant's fault my tummy hurts."
 

oc

peanutbutterchocolate
Dec 2, 2010
9,021
0
0
please don't change the chili cheese fries... please

so good
 

BigDug13

Member
Dec 20, 2006
20,190
1
0
Their strawberry shakes are pretty much the best fast food shakes out there. They use real strawberry compote blended with ice cream instead of flavored syrup. And their breakfast menu is pretty good. And burgers/fries.
 

Valnen

Member
Aug 4, 2009
20,974
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0
35
Citrus Heights
how many places have hole in the wall mexican joints? that seems like a major city thing

My favorite hole in the wall place in the Sacramento area charges about $3 a taco, too. That's a big difference in price, considering on Taco Tuesday $3-4 gets you like 9 tacos.
 

DizzyCaffeine

Member
Feb 23, 2013
3,703
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420
Southern California
Love Del Taco. My go-to stoner meal is macho nachos, spicy jack quesadilla and 2 bean and cheese burritos...and maybe macho fries too (their fries are awesome).

And I don't know what's up with their coffee, but it's delicious.
 

EightBitNate

Member
Mar 27, 2012
11,065
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820
Del Taco is the only restaurant to ruin my butthole. White Castle, Taco Bell, and Chipotle don't hold a candle toward what Del Taco does to you.
 

soundscream

Member
Aug 23, 2009
17,223
11
735
Neogaf has digestive issues. Never had any problems eating Del Taco. Taco Tuesday is fucking awesome, by the way. The classic tacos are better than the tacos from Taco Bell, though that admittedly isn't saying much.

I disagree. I eat everything taco bell included, and never have issues. The one time I went to a del taco and got 2 tacos, I had the most explosive of diarrhea's.
 

DizzyCaffeine

Member
Feb 23, 2013
3,703
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420
Southern California
Del Taco is the only restaurant to ruin my butthole. White Castle, Taco Bell, and Chipotle don't hold a candle toward what Del Taco does to you.

I disagree. I eat everything taco bell included, and never have issues. The one time I went to a del taco and got 2 tacos, I had the most explosive of diarrhea's.

That sucks. I've personally never had an issue there.
 

Fenderputty

Banned
Apr 14, 2008
23,126
0
0
Cali
Except for the original three on the way to Vegas in
Barstow, they're not that good.

I get a craving for a chicken soft taco every once in a while.
 

Parallax

best seen in the classic "Shadow of the Beast"
Sep 11, 2005
31,446
1
1,255
35
los angeles
You should probably eat more fiber, or get your incredibly delicate digestive system checked by a doctor.
If you can't eat a reasonable amount of fast food without experiencing gastric distress, the problem's with you, not the restaurant.

Do you honestly think a nationwide chain would still be in business if it caused even 10% of its customers to get sick?

my digestive system is just fine. it would be saying something if i were the only one to get sick from them, but i know a few people that have sunk toilets on del taco food.

and it isnt a nationwide chain. its a local one. which is the purpose of this thread.


Maybe you should eat reasonable serving sizes and regular portions.
"Oh no, I binged on an excessive quantity of processed convenience food that should be eaten sparingly by definition, but it's the restaurant's fault my tummy hurts."


i dont binge eat del taco tacos. a few tacos from there or a few slices from little caesars are enough to hit me. nice try though
 

ILoveBish

Member
Feb 1, 2010
4,224
0
775
Del taco is how I became obese. I recommend the chicken soft tacos along with the normal cheeseburgers. Last time I ate there I got food poisoning.
 

Rootbeer

Banned
Jan 9, 2012
16,204
12
785
I'll stick to Rubios for my fish taco needs.

I've never eaten Del Taco but when I walk by one it basically looks like a Taco Bell including the food signs they have on the windows

I hope the quality is better than Taco Bell, because Taco Bell makes enough sub-par mexican food for the nation, we need more decent places
 

water_wendi

Water is not wet!
Oct 8, 2006
19,066
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I'll stick to Rubios for my fish taco needs.

I've never eaten Del Taco but when I walk by one it basically looks like a Taco Bell including the food signs they have on the windows

I hope the quality is better than Taco Bell, because Taco Bell makes enough sub-par mexican food for the nation, we need more decent places

Much better quality than Taco Bell.
 

Eyeron

Member
Jun 13, 2014
629
52
440
Guilty pleasure. Big fat chicken tacos with del scorcho sauce, fries and cherry coke. Hnnng
 

SoulUnison

Banned
Dec 4, 2011
9,090
619
840
Pacific Northwest, United States
i dont binge eat del taco tacos. a few tacos from there or a few slices from little caesars are enough to hit me. nice try though

Hey, you're one who literally said "i can eat large quantities of many items."
That sounds to me like you eat too much of too many things.

Also, I didn't realize they weren't nationwide, but they're at least all up and down the west coast, here.
They wouldn't be able to stay open if a statistically noticeable portion of their customers were consistently made sick in a way that was objectively the fault of the food or its preparation.
 

way more

Member
Jun 9, 2004
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Why do people even go to Del Taco when Rubio's is right across the street?




It's like you are either blind or dumb.
 
Apr 3, 2009
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Del taco is like the good and quality version of taco bell if that even says anything.

Their fries are good if you can get them to serve them hot if you like fries and their spicy chicken quesadillas with mild sauce are good too. But holy shit I would not eat at del taco cause I do not eat fast food.

If my life got really bad and I was really depressed and didnt care about eating at fast food I'd probably go to them first though. Most fast food is garbage, at least some places like el pollo loco try to be half decent.
 
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