How much existing debt of Del Taco was repaid in connection with the transaction?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
, which allows us to not disclose the transaction price allocated to unsatisfied performance obligations when the transaction price is a sales-based royalty.
3. BUSINESS COMBINATION
On March 8, 2022 (the "Closing Date"), the Company acquired 100% of the outstanding equity interest of Del Taco for cash according to the terms and conditions of the Agreement and Plan of Merger, dated as of December 5, 2021 (the "Merger Agreement"). The acquisition of Del Taco has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company treated as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value. Jack in the Box acquired Del Taco as a part of the Company's goal to gain greater scale and accelerate growth.
In connection with the transaction, the Company repaid Del Taco's existing debt of $115.2 million related to a syndicated credit facility and Del Taco entered into a new syndicated credit facility.
The total purchase consideration for Del Taco was $593.3 million. Each share of Del Taco common stock issued and outstanding was converted into the right to receive $12.51 in cash without interest, less any applicable withholding taxes ("Merger Consideration"). Additionally, in connection with the transaction, each Del Taco equity award granted under Del Taco's equity compensation plans was either (i) converted into the right to receive Merger Consideration or (ii) converted into equity awards with respect to Jack in th
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, $115.2 million of Del Taco's existing debt was repaid in connection with the acquisition by Jack in the Box. This debt was related to a Syndicated Credit Facility dated August 5, 2015, and was repaid on the closing date of the acquisition. Following the repayment of this debt, Del Taco entered into a new syndicated credit facility.
This repayment of existing debt is a common step in corporate acquisitions, as the acquiring company often restructures the financial obligations of the acquired entity. For a prospective Del Taco franchisee, this detail provides insight into the financial restructuring that occurred during the acquisition and the establishment of a new credit facility for Del Taco.
The FDD also mentions that the total purchase consideration for Del Taco was $593.3 million, which included cash paid to settle Del Taco's existing debt and $7.1 million of seller transaction costs funded by Jack in the Box. This gives potential franchisees a clearer picture of the overall financial transaction and how Del Taco's debts were handled during the acquisition.