In a $575 million transaction, Jack in the Box Inc (JACK) will acquire Del Taco Restaurants Inc (TACO).  Del Taco operates 600 restaurants in 16 states with virtually all facilities offering drive-through capability.  The combined restaurant count for the two brands will comprise 2,800 locations in 25 states.

Darin Harris, CEO of Jack in the Box, stated “This is a natural combination of two like-minded challenger brands with outstanding growth opportunities.”  Harris noted, “Del Taco has a loyal, passionate guest base and a strong operating model and we believe that we can lever our infrastructure, experience, refranchising, and development strategy to support Del Taco’s growth plans and expand the company footprint.”

The transaction is expected to deliver earnings accretion in the mid-single digit earnings per share in the first year after acquisition.