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. 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,” said Steven Brake, Senior Vice President and Chief Financial Officer for Del Taco Holdings, Inc. “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 United States. Currently, Del Taco’s strongest markets include Southern California, Phoenix, Las Vegas, Salt Lake City and the chain is expanding in Colorado, Michigan and recently opened its second location in Florida.
Del Taco Holdings, Inc. will be headquartered in Lake Forest, California.
Founded in 1964, Del Taco, the Lake Forest, California-based company operates or franchisees more than 515 restaurants in 16 states. Del Taco offers a full range of made-to-order Mexican items such as tacos, burritos, quesadillas and American favorites including cooked-to-order burgers, fries and shakes. Del Taco uses fresh ingredients including hand-made salsa, fresh produce, freshly grated cheddar cheese, chicken grilled every hour and lard-free beans made from scratch.