Veteran international chain restaurant operators Sid Feltenstein, Chairman of Sagittarius Brands, and Ron Powell, president and CEO of Sagittarius Brands, announced the transaction. Private equity investors in the acquisition are Grotech Capital, Charles Bank Capital and Leonard Green Partners. Terms of the transaction were not released but according to Feltenstein, the transaction should be completed in 60 days.
Feltenstein and Powell, who were instrumental in the growth and eventual sale of other major international quick-service brands, said the transaction will give Sagittarius Brands more than 1,000 units across the United States and system-wide sales in excess of $1 billion annually.
“We are very excited about adding Del Taco to the Sagittarius Brands family,” Feltenstein said. “The Mexican quick-serve category continues to show positive growth, and this acquisition will bring together two companies that are very strong in their respective categories and geographically – both having locations in complementary regions of the country. The potential is enormous to leverage the growth of both brands through multi-branding.”
Kevin K. Moriarty, Chairman and CEO of Del Taco said, “This deal with Sagittarius Brands will give Del Taco strong growth opportunities that will benefit the brand, our employees and our franchise community. Sid and Ron are experienced restaurant operators with an excellent track record. I’m more than comfortable turning over the Del Taco’s helm to this team.”
Founded in 1964, Del Taco is the nation’s second largest Mexican quick-serve chain with annual unit volumes that exceed $1.2 million. Moriarty took the reigns at Del Taco in 1990 and the company has since posted fifteen years of consecutive same store sales growth. In 2005, Del Taco opened 34 new restaurants, which included new markets such as Michigan, Idaho, and Oregon. In addition to new company store growth, Del Taco currently has sixty franchise development agreements in place to open 338 new restaurants over the next five years.
“This transaction will enable both companies to expand their popular and successful concepts into new and existing markets at an accelerated rate, while at the same time allowing our franchise and company-owned stores to capitalize on the growing seafood and Mexican segments through multi-branding,” said Ron Powell. “It’s the perfect marriage of a company that has pioneered the seafood casual dining category with restaurants primarily in the south and southeast, and a company that is a pioneer in the Mexican category primarily in the western states. There will be significant growth opportunities for employees and franchisees of both systems and greater combined purchasing power for the emerging multi-brand organization which will benefit each concept’s bottom line.”