What is the process Del Taco uses to consolidate its financial statements?
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 the Box common stock. Other components of purchase consideration include cash paid to settle Del Taco's existing debt and $7.1 million of seller transaction costs funded by Jack in the Box.
As part of the Merger Agreement, on the Closing Date, the Company assumed Del Taco's historical equity compensation plans. The awards under Del Taco's historical equity compensation plans that were not subject to accelerated vesting were exchanged for replacement awards of the Company, which included Del Taco's non-accelerating restricted stock awards ("non-accelerating RSAs"). Immediately following the Merger, these replacement awards were modified to accelerate the remaining vesting period to be one year following the Closing Date, other than the awards already scheduled to vest on June 30, 2022.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the company, Jack in the Box Inc., acquired Del Taco on March 8, 2022. The acquisition was accounted for using the acquisition method in accordance with ASC 805, Business Combinations. This means Jack in the Box is treated as the accounting acquirer, and the assets and liabilities were recognized at their acquisition date fair value. The goal of acquiring Del Taco was to increase scale and accelerate growth for Jack in the Box Inc.
As part of the acquisition, Del Taco's existing debt of $115.2 million related to a syndicated credit facility was repaid. Del Taco then entered into a new syndicated credit facility. The total purchase consideration for Del Taco was $593.3 million, with each share of Del Taco common stock converted into the right to receive $12.51 in cash, less any applicable withholding taxes. Equity awards were also converted into either the right to receive the merger consideration or into equity awards with respect to Jack in the Box common stock.
To ensure the reasonableness of financial information, the company compared revenue growth rate assumptions for the Del Taco brand to industry reports and historical trends. Sensitivity analyses were also performed to assess the impact of changes to these assumptions on the company's fair value estimate. KPMG LLP has served as the company's auditor since 1986, providing an independent review of the financial statements.