Jack in the Box Inc. completed the acquisition of Del Taco Restaurants, Inc. from a group of shareholders.
Jack in the Box estimates that the transaction values Del Taco at a synergy adjusted multiple of approximately 7.6x trailing twelve months Adjusted EBITDA. Post completion of the acquisition, the officers and Directors of Del Taco will become officers and Directors of the surviving company. The transaction is subject to the expiration or termination of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the adoption of the Merger Agreement by Del Taco's stockholders, the absence of a material adverse effect on Del Taco, as defined in the Merger Agreement, other customary conditions and regulatory approvals. The merger agreement includes no financing contingency. The transaction is unanimously approved by Board of Directors of both Jack in the Box and Del Taco. The Del Taco Board of Directors unanimously recommends that the shareholders vote for the proposal to adopt the merger agreement. As of March 7, 2022, Del Taco Restaurants, Inc. shareholders approved the transaction. The transaction is expected to close in the first calendar quarter of 2022. As of January 28, 2022, the transaction is expected to close on March 8, 2022. The agreement delivers immediate value to Del Taco shareholders and will greatly benefit our brand, team members, franchisees, and loyal guests for many years to come. Jack in the Box expects the transaction to be mid-single-digit accretive to earnings per share excluding transaction expenses in year one and meaningfully accretive beginning in year two once full synergizes are realized. Jack in the Box expects to maintain a leverage ratio within its target range of 4x to 5.5x total debt to Adjusted EBITDA and an investment grade credit rating. Jack in the Box expects the combined company to realize run-rate strategic and cost synergies of approximately $15 million by the end of fiscal year 2023, with approximately half of the synergies achieved in the first year.
BofA Securities is serving as exclusive financial advisor and Jonathan K. Layne and Andrew Friedman of Gibson, Dunn & Crutcher LLP are serving as legal advisors to Jack in the Box. Piper Sandler & Co. acted as exclusive financial advisor and provided fairness opinion to the Del Taco Board of Directors and Scott Williams, Eric Orsic, Benjamin Strauss, Gregory E. Heltzer, William R. Pomierski, Brandon Sarkauskas, Michael L. Boykins, Heidi J. Steele and Chris Stacker of McDermott Will & Emery LLP acted as legal advisors to Del Taco, Levy Family, Lime Partners and Belfer Investment Partners L.P. Continental Stock Transfer & Trust Company acted as transfer agent to Del Taco. Okapi Partners LLC acted as proxy solicitor to Del Taco for a fee not to exceed $0.02 million plus reimbursement of certain expenses. Piper Sandler & Co. will receive a fee, currently estimated to be approximately $7.2 million from Del Taco, $1 million of which has been earned by Piper for rendering its fairness opinion.
Jack in the Box Inc. (NasdaqGS:JACK) completed the acquisition of Del Taco Restaurants, Inc. (NasdaqCM:TACO) from a group of shareholders on March 8, 2022. As a result of the Merger, Del Taco Restaurants, Inc. became a wholly-owned subsidiary of Jack in the Box Inc. Taco's common stock will cease trading as of March 8, 2022, on the NASDAQ and will be delisted. Del Taco intends to file with the SEC a Certification and Notice of Termination of Registration on Form 15 requesting the termination of registration of the Common Stock under Section 12(g) of the Exchange Act and the suspension of Del Taco's reporting obligations under Sections 13 and 15(d) of the Exchange Act. Darin Harris and Tim Mullany (JACK's Chief Executive Officer and Chief Financial Officer, respectively) became the directors of TACO. In accordance with the terms of the Merger Agreement, immediately following the Effective Time, the following became the officers of TACO: (i) John D. Cappasola, Jr. as Chief Executive Officer, (ii) Darin Harris as President, (iii) Tim Mullany as Chief Financial Officer, (iv) Sarah Super as Secretary and (v) Michael Snider as Vice President and Assistant Secretary.