Combined Company Renamed Del Taco Restaurants, Inc.
Business Combination to Close Today
CHICAGO & LAKE FOREST, Calif.--(BUSINESS WIRE)--
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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150630006207/en/
Source: Levy Acquisition Corp. and Del Taco Holdings, Inc.