Jack In The Box Announces Agreement To Sell Qdoba To Apollo Affiliates For $305M

Jack in the Box (JACK) announced that it has entered into a definitive agreement to sell Qdoba Restaurant Corporation, 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 (APO).

Under the terms of the agreement, the Apollo funds will purchase Qdoba for approximately $305M 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 CEO 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.”

The Company intends to provide guidance for fiscal 2018 in connection with its presentation at the ICR Conference on January 9, 2018.