JACK did what?
Jack in the Box has entered into a definitive agreement to purchase Del Taco for $575 million, or $12.51 in cash in an inexplicable move. The transaction is expected to close during the first calendar quarter of 2022. Combined, the companies will have over 2,800 restaurants across 25 states. The two chains plan to expand their footprint and develop new menu offerings. Both brands have had similar strategies in the past 18 months, adding new loyalty programs and focusing on unit development, with Jack in the Box restarting franchise development and Del Taco deploying new prototypes and expanding through Reef (not necessarily a positive.) We spoke with a few JACK franchisees, and they were not happy. As a franchisee, how would you react to the new strategy that senior management will be devoting efforts to enhancing TACO as a direct competitor? Why would anyone want increased competition in your core market if you are JACK?
Instant DASH
DASH IS A LONG
DASH is now offering grocery delivery in 10 to 15 minutes from a DashMart location in the Chelsea neighborhood in New York. More locations and partners are coming over the next few months. DoorDash introduced DashMarts in 2020 to create a virtual shop with over 2,000 essential items ranging from grocery staples to local specialties. The warehouses allow local businesses to reach consumers online and simplify delivery logistics. The "ultra-fast" delivery will employ full-time couriers from DashCorps, a DoorDash company. They will be compensated with the benefits of traditional employees, including hourly pay starting at $15 per hour.
SYY NEWS BULLISH FOR CHEF
CHEF is a Quad 1 LONG and will benefit from continued reopening and a thoughtful M&A strategy.
SYY agrees to acquire The Coastal Companies, a fresh produce distributor and value-added processer, from Continental Grain Company, to operate under its specialty produce business FreshPoint. Founded in 1992 and based in Laurel, MD, The Coastal Companies generates annual revenue of $600M and is comprised of three integrated businesses:
- Foodservice Distribution – Coastal Sunbelt Produce is a leading foodservice supplier of produce, specialty, fresh-cut, and value-added products in the Mid-Atlantic region.
- Retail Distribution – Lancaster Foods is a wholesale supplier of products and fresh-cut products to retail distribution centers and store locations.
- Value-Added Manufacturing – East Coast Fresh is a regional processor of fresh-cut and value-added products, manufacturing items such as pre-cut fruits and vegetables, salsas, meal preparation solutions, and grab-and-go items.
