(Bloomberg) -- Jack in the Box Inc. agreed to buy Del Taco Restaurants Inc., marrying the offbeat chain with a fast-food competitor also popular with late-night diners.
The burger restaurant will pay $12.51 a share in cash for Del Taco, a Mexican-food brand concentrated largely in the southwestern U.S., representing a 66% premium over the closing price on Dec. 3. The total transaction is valued at $575 million, including existing debt, according to a statement Monday.
The deal expands the reach of two chains toiling largely in the shadows of larger rivals such as McDonald’s Corp. and Yum! Brands Inc.’s Taco Bell. Jack in the Box, which has embraced an outsider image and offered quirky promotions including a cannabis-themed $4.20 meal, already offers cheap tacos on its menu.
“This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities,” Darin Harris, Jack in the Box’s chief executive officer, said in the statement.
Del Taco shares soared 65% to $12.40 as of 8:35 a.m. before regular trading in New York. Jack in the Box was little changed with minimal premarket trades.
The deal is expected to close in the first quarter.
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