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Jack in the Box sells Qdoba
By Rebekah Schouten
Qdoba Mexican Eats operates more than 700 locations.
SAN DIEGO — Jack in the Box Inc. has entered into a definitive agreement to sell Qdoba Restaurant Corp. to Apollo Global Management LLC, for approximately $305 million in cash. The transaction is expected to close by April 2018.
Qdoba Mexican Eats is a fast-casual restaurant chain that serves Mexican-style cuisine and operates more than 700 locations in 47 states, the District of Columbia and Canada. The chain had system-wide sales of more than $820 million in fiscal 2017.
Lenny Comma, chairman and CEO of Jack in the Box
"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," said Lenny Comma, chairman and CEO of Jack in the Box Inc. "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."
Jack in the Box acquired Qdoba in 2003, when the fast-casual Mexican-style restaurant chain operated 85 locations in 16 states and had $65 million in system-wide sales. Over the past 14 years, net units have grown at a compound annual growth rate of 16 percent, Comma said.
Lance Milken, senior partner at Apollo
"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," said Lance Milken, senior partner at Apollo. "We are firmly committed to Qdoba's continued growth as a leading fast-casual restaurant operator."
The purchase of Qdoba adds to Apollo's portfolio of food and beverage industry ventures. The company also owns specialty grocery retailer The Fresh Market and Chuck E. Cheese's parent CEC Entertainment, Inc. Apollo also owns stock in Hostess Brands Inc.
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