Why did Del Taco (TACO) stock skyrocket 65% today?

Be the First to Comment Read

Why did Del Taco (TACO) stock skyrocket 65% today?

Follow us on Google News:
 Why did Del Taco (TACO) stock skyrocket 65% today?
Image source: Jonathan Weiss,Shutterstock

Highlights

  • Del Taco Restaurants, Inc. (TACO) has entered into a definitive agreement to get acquired by Jack in The Box (JACK) for around US$575 million.

  • Jack Inc would pay US$12.51 in cash for each share of Del Taco.

  • Jack In The Box CEO Darin Harris said the purchase would create a strong "financial model" to scale up the business.

Shares of Del Taco Restaurants, Inc. (NASDAQ: TACO) jumped more than 65% after announcing that it entered a definitive agreement to be acquired by Jack in the Box Inc. (NASDAQ: JACK) for around US$575 million in an all-cash deal.

Del Taco is an American fast-food restaurant chain based in Lake Forest, California, focusing on Mexican cuisine. Its top sellers include burgers, French fries, etc.

Also Read: BuzzFeed (BZFD) stock set to debut in Nasdaq on Dec 6 after SPAC deal

Jack in the Box is also a fast-food chain operator based in San Diego, California, It has operations in more than 2,800 locations.

According to the deal, Jack in the Box would pay US$12.51 for each share of Del Taco in cash at a premium of around 66% based on its closing price on Friday. Jack said that it expects the deal to boost its earnings immediately. Additionally, the combined firm would be able to save around US$15 million by 2023 through improved efficiency.

Also Read: Rumble eyes Nasdaq listing after SPAC deal: All you need to know

Del Taco (TACO) and Jack In The Box (JACK) has entered into a definitive agreement

Also Read: DeFi project EverRise (RISE) soars on protocol upgrade – know details

Stock performance and financial highlights of Del Taco:

The shares of Del Taco (TACO) traded at US$12.43 at 10:56 am ET on December 6, up 65.07% from its closing price of December 3. Its stock value tumbled 15.77% YTD.

The firm has a market cap of US$452.35 million, with a P/E ratio and forward P/E one year of 23.45 and 15.69, respectively. Its EPS is US$0.53. TACO's trading volume was 272,685 on December 3. The company's revenue ticked up 2.9% YoY to US$124.3 million in Q3, FY21. For the period, it reported a net income of US$3.8 million, or US$0.10 per diluted share, compared to US$5.8 million, or US$0.15 per diluted share in Q3, FY20.

Also Read: Alibaba (BABA) shares fell over 46% this year, making them cheapest ever

Bottomline

Jack In The Box CEO Darin Harris said the purchase would create a strong "financial model" to scale up the business. “This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities,” he said in a statement.

The shares of Jack In The Box Inc tumbled 4.55% to US$80.18 at 10:59 am ET on December 6.

Disclaimer

Featured Articles