Levy family buys controlling stake in Del Taco

A controlling stake in the Del Taco Mexican fast-food chain is being acquired by Chicago’s Levy family of restaurateurs and unnamed partners for $120 million.

Numbers revealed in the announcement suggest paterfamilias Larry Levy, his relatives and non-related investors will own about 46 percent of Del Taco, which lags only Taco Bell in number of units within the Mexican quick-service market. A second financial maneuver will increase the stake to 48.8 percent, with the remaining 51.2 percent held by public shareholders and current members of Del Taco’s executive team.

Buyers and sellers peg Del Taco’s enterprise value at $500 million.

Levy will become chairman of the franchisor after the deal is consummated. The announcement issued today says members of Del Taco’s current management will stay in place, including the chain’s current CEO and president Paul Murphy.

His sons, Ari Levy and Steve Florsheim, will hold equity in the company and apparently participate in its management.  Both are well-known restaurateurs in Chicago.

Levy’s group noted that Del Taco has been growing, but currently encompasses just 550 quick-service restaurants in 16 states, with a concentration in southern California and the Southwest. Del Taco owns and operates 300 of the stores, and the rest are franchised.

The stores average $1.2 million in annual sales, which pushed 2014 systemwide sales to $656.1 million, according to the buyers.

“We have been searching to acquire a growing restaurant brand for over a year and when we focused on the iconic Del Taco, we knew it was perfect,” Larry Levy said in the announcement. “To me, it offers the quality and freshness found at fast-casual concepts but with an average check price that is more typical of a QSR.”

Levy’s background has been in fine dining and the management of foodservice facilities in convention halls and arenas, which often feature fast-food brands. He sold his family run Levy Restaurants to Compass Group in two stages, in 2000 and 2006. Now a Compass division, the business continues to operate as Levy Restaurants.

Larry Levy and his sons also are investors in the Blaze Pizza fast-casual chain and the Pollo Campero Guatemalan grilled-chicken chain.


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