Combined Company Renamed Del Taco
Restaurants, Inc.
Business Combination to Close Today
Levy Acquisition Corp. (“LAC”) (NASDAQ CM: TACO and TACOW) and
Del Taco Holdings, Inc. (“Del Taco”), the second largest
Mexican-American QSR chain by units in the United States, operating
restaurants under the name Del Taco®, announced that LAC’s
stockholders have voted to approve the merger of a subsidiary of
LAC with Del Taco (the “Merger” or “Business Combination Proposal”)
at the special meeting of stockholders held today. Over 99% of the
shares voted today were voted in favor of the transaction with Del
Taco. LAC’s Board of Directors had previously approved the Business
Combination Proposal and recommended that its stockholders vote in
favor. Del Taco’s Board of Directors and stockholders had also
previously approved the Merger.
In addition to approving the Business Combination Proposal,
LAC’s stockholders approved the proposals to amend the amended and
restated certificate of incorporation of LAC, including changing
LAC’s name to Del Taco Restaurants, Inc. and removing certain
provisions related to LAC’s previous status as a blank check
company; the proposal to elect five new directors (Patrick Walsh,
Eileen Aptman, Paul J.B. Murphy, III, Joseph Stein and R.J.
Melman); and the proposal to approve the Del Taco Restaurants, Inc.
2015 Omnibus Incentive Plan.
The Merger will close today, June 30, 2015 and Del Taco will
become the sole subsidiary of LAC, whose name has been changed to
Del Taco Restaurants, Inc. The combined company’s common stock and
warrants will continue to be listed on NASDAQ’s Capital Market
under the ticker symbols “TACO” and “TACOW”, respectively. The
combined company’s units, which had been traded under the ticker
symbol “TACOU”, will separate into their components of one share of
common stock and one-half of one warrant to purchase common stock
on July 1, 2015.
Larry Levy, Chairman of the Del Taco and LAC boards, commented,
“We are delighted that LAC’s stockholders have approved the Merger
and are thrilled that Del Taco is now embarking on this new chapter
as a publicly traded company.”
Levy continued, “Del Taco is well suited for the public markets
as it seeks to increase its market share in the growing limited
service category, extend its track record of positive same store
sales, enhance restaurant operations and leverage infrastructure,
and expand its restaurant base. We believe that Del Taco’s
footprint can expand substantially beyond its approximately 550
locations today, providing shareholders with a long runway of
opportunity. We look forward to the future acceleration of Del Taco
restaurant openings, both in markets where the brand is already
known and loved, as well as in new territories where we see huge
potential for Del Taco’s unique blend of freshness, quality, value
and convenience.”
Levy concluded, “Del Taco’s executive management team has done
an exceptional job in delivering superior financial performance
while enhancing the experiences of our guests. Their efforts have
not only resulted in an incredible record of achievement but have
also laid the groundwork for continued success. As I’ve traveled
the country talking about Del Taco and this exciting merger, it has
been gratifying to hear so many stories of our Levy Acquisition
shareholders becoming passionate Del Taco customers and our Del
Taco customers becoming proud public shareholders.”
Paul Murphy, President and Chief Executive Officer of Del Taco,
stated, “Our merger with LAC and entrance into the public markets
is a milestone event for our company that has been made possible
through the hard work and dedication of all of our stakeholders –
our support center and restaurant teams, our franchisees, our
vendors, and our financial sponsors. We wholeheartedly thank them
for their support and look forward to continue working with them in
realizing Del Taco’s full potential.”
Murphy continued, “Our ‘Combined Solutions’ strategy has been
instrumental in enabling us to leverage our brand strengths and
align guest experiences with an elevated brand promise. We have
generated 11 consecutive quarters of positive company-operated same
store sales growth with the most recent 8 quarters including both
traffic and check growth. We have raised our company-operated
average unit volumes to $1.3 million, increased our restaurant
contribution and adjusted EBITDA margins, and lowered our
outstanding debt. Although we have already accomplished a great
deal in strengthening our overall financial condition, we believe
that we are still in the early stages of what we can achieve at Del
Taco.”
Murphy concluded, “This merger has solidified a strong and
cohesive partnership between Del Taco management and the Levy Team,
while providing Del Taco with greater financial flexibility through
an improved balance sheet. The future of Del Taco has never been
brighter.”
About the Merger
On March 12, 2015, LAC and Del Taco announced the planned Merger
under which Del Taco would become the sole subsidiary of LAC by
means of a two-step transaction.
On March 20, 2015, as a first phase of the Merger, the Levy
family and a group of investors purchased $120 million of Del Taco
common stock. The net proceeds from this investment helped repay
$111.2 million of high-interest subordinated indebtedness. Upon
today’s closing of the Merger, Del Taco will repay an additional
$68.6 million of senior debt.
With the nominal redemptions by LAC shareholders as part of the
Merger, LAC will be able to achieve its goal of acquiring $60
million of Del Taco shares from legacy Del Taco shareholders for
cash, instead of LAC shares. This limits the dilution of LAC
shareholders to the maximum extent possible under the terms of the
Merger Agreement.
Advisors
Jefferies LLC acted as M&A Advisor to LAC; Citigroup Global
Markets Inc. acted as Equity Capital Markets Advisor to LAC; and
McDermott, Will & Emery, LLP and Sperling & Slater, PC
acted as legal counsel to LAC. William Blair & Co. rendered a
fairness opinion to LAC’s Board of Directors. Piper Jaffray and
Goldman, Sachs & Co. acted as M&A Advisor to Del Taco, and
Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal
counsel to Del Taco.
About Levy Acquisition Corp.
Levy Acquisition Corp. was a blank check company formed in
October 2013 for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
similar business combination. In November 2013, LAC consummated its
initial public offering of 15 million units, each unit consisting
of one share of common stock and one-half of one warrant. Each
whole warrant entitles the holder thereof to purchase one share of
common stock at a price of $11.50 per share. Aggregate proceeds of
$150 million from the IPO, which were placed in trust pending
completion of LAC’s initial business combination, have been
released to the company. With today’s Merger closing, LAC will
become known as Del Taco Restaurants, Inc.
About Del Taco Holdings, Inc.
The Del Taco brand was founded in Southern California in 1964.
Today, Del Taco and its franchisees operate approximately 550
restaurants in 16 states, serving more than three million guests
each week. Del Taco owns just over 300 of the stores in its system
with the balance owned and operated by franchisees.
At Del Taco, menu items are made-to-order with fresh
ingredients, including cheddar cheese grated from 40-pound blocks,
handmade pico de gallo salsa, lard-free beans slow-cooked from
scratch, and marinated chicken grilled in-restaurant. The menu
includes classic Mexican dishes such as tacos, burritos,
quesadillas and nachos as well as American favorites including
hamburgers, crinkle-cut fries and shakes. Ahead of the 2014
celebration of Del Taco’s 50th anniversary, Del Taco launched the
UnFreshing Believable® campaign to communicate the lengths the
company goes to in order to deliver quality, made-to-order menu
items created with freshly-prepared ingredients at unbelievable
prices.
For more information, please visit www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain
a number of “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include information concerning Del Taco’s possible or
assumed future results of operations, business strategies,
competitive position, industry environment, potential growth
opportunities and the effects of regulation. These statements are
based on LAC’s or Del Taco’s management’s current expectations and
beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,”
“propose” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. Such forward-looking
statements are subject to known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
LAC’s or Del Taco’s management’s control that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These risks, uncertainties, assumptions
and other important factors include, but are not limited to, (1)
the ability to meet NASDAQ’s listing standards following the
Merger; (2) the risk that the transaction disrupts current plans
and operations of Del Taco as a result of the announcement and
consummation of the transactions described herein; (3) the ability
to recognize the anticipated benefits of the business combination,
which may be affected by, among other things, competition, the
ability of the combined company to grow and manage growth
profitably, maintain relationships with suppliers and retain its
management and key employees; (4) costs related to the business
combination; (5) changes in applicable laws or regulations; and (6)
the possibility that Del Taco may be adversely affected by other
economic, business, and/or competitive factors.
Forward-looking statements included in this release speak only
as of the date of this release. Neither LAC nor Del Taco undertakes
any obligation to update its forward-looking statements to reflect
events or circumstances after the date of this release. Additional
risks and uncertainties are identified and discussed in LAC’s
reports filed with the SEC and available at the SEC’s website at
www.sec.gov and the Company’s website at
www.levyacquisitioncorp.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20150630006207/en/
Media Relations:ICRJulia Young,
646-277-1280Julia.young@icrinc.comorInvestor Relations:ICRRaphael
Gross, 203-682-8253Raphael.gross@icrinc.com
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