Support NeoGAF

[XiaNaphryz]

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]

now everyone can be aware of the bowel poison that is del taco

except for their breakfast menu. thats dope

 

[Weetrick]

Fuck Del Taco

 

[grandjedi6]

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.

 

[Corran Horn]

I like del taco for cheap tacos on tuesdays and their salsa. Nothing really special about the place besides that for me though.

 

[XiaNaphryz]

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.

The best thing on Del Taco's regular menu are the cheeseburgers, funnily enough.

 

[ThatCrazyGuy]

Hell yea. My fast food go to.

 

[water_wendi]

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]

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]

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]

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.

 

[Almighty]

Del Taco is a good place to go for cheap tacos and that is about it.

 

[rude]

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?

 

[GoldenEye 007]

Ugh I'd rather eat Taco Bell than ever go to Del Taco. There has been a location at UCF that I have no clue how it has stayed open so long.

 

[Valnen]

You guys realize this isn't real mexican food right?

People eating there don't care. Most "real" mexican food is a lot more expensive.

 

[LegatoB]

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 figured the purpose of Del Taco was the dining room's open at 3am. That's the purpose of the local one, anyway

 

[water_wendi]

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]

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.

 

[GoldenEye 007]

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 they're not open at like 3am when they're really needed.

 

[Stabby McSter]

I didn't realize Del Taco wasn't a publicly traded company. And I also remembered the Del Taco Guy commercials.

Del Taco is weird.

 

[Parallax]

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]

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]

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]

please don't change the chili cheese fries... please

so good

 

[BigDug13]

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]

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.

 

[TheSadRanger]

They give you french fries with tacos

 

[DizzyCaffeine]

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]

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]

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.

 

[water_wendi]

Never had bowel trouble from Del Taco.

 

[DizzyCaffeine]

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]

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.

 

[Surface of Me]

I only go when they have carnitas. Taco Cabana is superior in every way.

 

[Parallax]

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

 

[hateradio]

Even though they're not the best, their fish tacos are pretty good.

 

[ILoveBish]

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.

 

[GrizzNKev]

There's one near me and I've never gone inside on principle. Their name and logo scream terrible.

 

[jack_package_200]

Barry is gonna be pissed while Ross is overjoyed

 

[Rootbeer]

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]

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.

 

[ReAxion]

Del Taco is cool. We don't talk about them on GAF enough.

 

[LyleLanley]

I want a taco.

 

[Eyeron]

Guilty pleasure. Big fat chicken tacos with del scorcho sauce, fries and cherry coke. Hnnng

 

[SoulUnison]

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.

 

[Parallax]

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.

can doesnt mean does.

 

[timetokill]

Barstow Del Taco is fucking awesome.

still, even the lesser Del Tacos are better than fucking Taco Bell.

 

[soundscream]

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

Don't know if it was just the establishment, but it was super greasy. Like the grease dripped out one side of the taco when I went to take a bite.

 

[way more]

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.

 

[Midnight Bliss]

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.