Del Taco Holdings, Inc. (formerly known as Sagittarius Brands, Inc.) announced the completion of a recapitalization transaction.
The recapitalization involved a refinancing of the company’s existing debt, the sale of the company’s Captain D’s subsidiary, and an investment of equity capital. The new senior credit facilities, led by Wells Fargo and GE Capital, feature a $160 million term loan and a $39 million revolving line of credit. In conjunction with the new credit facility, Goldman Sachs Mezzanine Partners led a new cash equity infusion into Del Taco with existing investors Charlesbank Capital Partners and Leonard Green & Partners also contributing significant new capital to the recapitalization. Finally, in order to focus on its core Del Taco brand, the company sold its Captain D’s subsidiary to Sun Capital Partners, Inc.
“These transactions result in an improved capital structure for Del Taco, and provide us increased flexibility to support our growth through a sole focus on the Del Taco brand,” says Steven Brake, senior vice president and chief financial officer for Del Taco Holdings, Inc. “This, combined with a significantly lower level of debt and cash interest requirements, allows Del Taco to improve cash flows and invest in the business. Our management and equity owners are excited about what this recapitalization means for the future of the brand.”
In 2009, Del Taco had system-wide sales of $568 million and currently operates 287 company-owned units with 231 franchised locations. The company’s growth plans include new company and franchise locations in various key markets in the U.S. Currently, Del Taco’s strongest markets include Southern California, Phoenix, Las Vegas, and Salt Lake City. The chain is expanding in Colorado and Michigan, and it recently opened its second location in Florida.
Del Taco Holdings, Inc. will be headquartered in Lake Forest, California.