(Adds details on bank mandates)
By Soyoung Kim and Olivia Oran
NEW YORK, June 25 U.S. fast-food chain Del Taco,
which specializes in Mexican cuisine as well as American
favorites like burgers and fries, is in the early stages of
exploring a sale that could fetch more than $500 million, people
familiar with the matter said on Wednesday.
Founded in 1964, Lake Forest, California-based Del Taco owns
and operates 546 restaurants in 17 U.S. states. The majority of
them are in West Coast states including California and Oregon.
Del Taco is owned by private equity firms that include
Goldman Sachs Mezzanine Partners, Charlesbank Capital Partners
and Leonard Green & Partners.
The owners are working with Piper Jaffray and Goldman Sachs
Group Inc on the sale process, the sources said,
requesting anonymity because the matter is private.
Goldman Sachs Mezzanine Partners led a new equity infusion
into Del Taco in 2010, with existing investors Charlesbank
Capital Partners and Leonard Green & Partners also contributing
new capital to the recapitalization.
Del Taco also refinanced its debt in April in a $260 million
deal led by GE Capital.
Representatives of Del Taco, Goldman Sachs, Piper Jaffray
and Leonard Green did not immediately respond to requests for
comment. Charlesbank declined to comment.
Del Taco offers made-to-order Mexican items such as tacos,
burritos and quesadillas as well as American classics including
burgers, fries and shakes.
The company is one of a number of restaurant chains trying
to sell themselves or go public as market valuations for the
sector continue to hold strong.
In May, Darden Restaurants Inc agreed to sell its
Red Lobster seafood chain to private equity firm Golden Gate
Capital LLC for $2.1 billion.
Carlson Restaurants Inc agreed to sell its TGI Fridays
casual dining chain to private equity firms Sentinel Capital
Partners and TriArtisan Capital Partners in May for more than
Recent public offerings from restaurant chains have included
Zoe's Kitchen Inc, Potbelly Corp and Papa
Murphy's Holdings Inc.
(Reporting by Soyoung Kim and Olivia Oran in New York; Editing
by Lisa Von Ahn)