SAN DIEGO--(BUSINESS WIRE)--Dec. 19, 2017--
Jack in the Box Inc. (NASDAQ: JACK) (the “Company”) today announced that
it has entered into a definitive agreement to sell Qdoba Restaurant
Corporation (“Qdoba”), a wholly owned subsidiary of the Company which
operates and franchises more than 700 QDOBA MEXICAN EATS®
restaurants, to certain funds managed by affiliates of Apollo Global
Management, LLC (together with its consolidated subsidiaries, “Apollo”)
(NYSE: APO). Under the terms of the agreement, the Apollo funds will
purchase Qdoba for approximately $305 million in cash, subject to
customary closing conditions and adjustments.
The transaction is expected to close by April 2018. The Company expects
to use the net cash proceeds after tax and transaction costs to retire
outstanding debt under its term loan, as required by the terms of its
credit facility.
Lenny Comma, chairman and chief executive officer of Jack in the Box
Inc., said, “For the past several months, we have worked closely with
our financial advisors and evaluated various strategic alternatives with
respect to Qdoba, including a sale or spin-off, as well as opportunities
to refranchise company restaurants. Following the completion of this
robust process, our Board of Directors has determined that the sale of
Qdoba is the best alternative for enhancing shareholder value and is
consistent with the Company’s desire to transition to a less
capital-intensive business model.
“At the time the Company acquired Qdoba in 2003, it had 85 locations in
16 states, with $65 million in system-wide sales. Over the past 14
years, net units have grown at a compound annual growth rate of 16
percent. Today, Qdoba is the second largest fast-casual Mexican food
brand in the U.S., with more than 700 locations in 47 states, the
District of Columbia and Canada, and system-wide sales of more than $820
million in fiscal 2017.
"Keith Guilbault, Qdoba Brand President, has assembled a talented and
experienced management team, and we wish them, the franchisees and all
of the brand employees continued success."
Apollo Senior Partner Lance Milken said, “We are extremely excited to be
acquiring Qdoba and look forward to working with the management team,
employees and franchisees to continue building the Qdoba brand. We are
firmly committed to Qdoba’s continued growth as a leading fast-casual
restaurant operator.”
Morgan Stanley & Co. LLC is serving as financial advisor and Gibson,
Dunn & Crutcher LLP is serving as legal counsel to the Company in
connection with this transaction. Apollo was advised by Morgan, Lewis &
Bockius LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Deutsche Bank
Securities Inc., and PJ Solomon.
The Company intends to provide guidance for fiscal 2018 in connection
with its presentation at the ICR Conference on January 9, 2018.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant
company that operates and franchises Jack in the Box® restaurants,
one of the nation’s largest hamburger chains, with more than 2,200
restaurants in 21 states and Guam. Additionally, through a wholly owned
subsidiary, the company operates and franchises QDOBA MEXICAN EATS®,
a leader in fast-casual dining, with more than 700 restaurants in 47
states, the District of Columbia and Canada. For more information on
Jack in the Box and Qdoba, including franchising opportunities, visit www.jackinthebox.com
or www.qdoba.com.
About Apollo Global Management, LLC
Apollo is a leading global alternative investment manager with offices
in New York, Los Angeles, Houston, Chicago, St. Louis, Bethesda,
Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi,
Singapore, Hong Kong and Shanghai. Apollo had assets under management
(AUM) of approximately $242 billion as of September 30, 2017 in Private
Equity, Credit and Real Assets invested across a core group of nine
industries where Apollo has considerable knowledge and resources. For
more information about Apollo, please visit www.agm.com.
Forward-Looking Statements
Statements about the expected timing, completion and effects of the
proposed transaction and related transactions and all other statements
in this news release, other than historical facts, constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. When
used in this news release, the words “expect,” “believe,” “anticipate,”
“intend,” “estimate,” “may,” “will” or similar words are intended to
identify forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements and any such
forward-looking statements are qualified in their entirety by reference
to the following cautionary statements. All forward-looking statements
speak only as of the date hereof and are based on current expectations
and involve a number of assumptions, risks, uncertainties and other
factors that could cause the actual results to differ materially from
such forward-looking statements, including, but not limited to (1) the
occurrence of any event, change or other circumstances that could give
rise to the termination of the definitive agreement or conditions to the
closing of the transactions contemplated by the definitive agreement may
not be satisfied or waived, (2) the failure to satisfy the closing
conditions contained in the definitive agreement, (3) risks related to
disruption of management’s attention from the Company’s ongoing business
operations due to the transaction, (4) the effect of the announcement of
the definitive agreement on the ability of the Company or Qdoba to
retain and hire key personnel and maintain relationships with its
customers, suppliers, and on its operating results and business
generally, (5) the transaction may involve unexpected costs, liabilities
or delays, (6) the Company’s and Qdoba business may suffer as a result
of the uncertainty surrounding the transaction, (7) the outcome of any
legal proceeding relating to the transaction, (8) the Company may be
adversely affected by other economic, business and/or competitive
factors, and (9) other risks to consummation of the transaction,
including the risk that the transaction will not be consummated within
the expected time period or at all.
Actual results may differ materially from those indicated by such
forward-looking statements. In addition, the forward-looking statements
represent the Company’s views as of the date on which such statements
were made. The Company anticipates that subsequent events and
developments may cause its views to change. However, although the
Company may elect to update these forward-looking statements at some
point in the future, it specifically disclaims any obligation to do so,
whether as a result of new information, future events or otherwise.
These forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the date
hereof. Additional factors that may affect the business or financial
results of the Company are described in the risk factors included in the
Company’s filings with the SEC, including the Company’s 2017 Annual
Report on Form 10-K, the Company’s quarterly reports on Form 10-Q and
Current Reports on Form 8-K.
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Source: Jack in the Box Inc.
Jack in the Box Inc.
Investor Contact:
Carol DiRaimo,
(858) 571-2407
Media Contact:
Brian Luscomb, (858)
571-2291