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Sagittarius Brands recapitalizes as Del Taco Holdings following Captain D's sale
May 19, 2010
A day after announcing the completion of thesale of Captain D'sSeafood Kitchen to an affiliate of Sun Capital Partners Inc., Sagittarius Brands Inc. says it has completed the recapitalization of its Mexican QSR brand Del Taco. Now known as Del Taco Holdings Inc., the company has received a new cash equity infusion and refinanced existing debt.
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.
"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," said Steven Brake, senior vice president and CFO for Del Taco Holdings. "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. Our management and equity owners are excited about what this recapitalization means for the future of the brand."
In 2009, 518-unit Del Taco had system-wide sales of $568 million with 287 company-owned units and 231 franchised locations. The company's growth plans include new company and franchise locations in various key markets in the United States. Del Taco's strongest markets include Southern California, Phoenix, Las Vegas and Salt Lake City. Additionally, the chain is expanding in Colorado, Michigan and recently opened its second location in Florida.
Paul Murphy, Del Taco CEO, said in October that the company has been taking advantage of the macroeconomic conditions to prepare for long-term growth, including the ulitimate goal of growing into a national brand in the next several years.
Del Taco Holdings will be headquartered in Lake Forest, Calif.
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