Jack in the Box Agrees to Sell Qdoba for $305 Million

After posting a decline of 3% in company-owned, same-store sales in the 52 weeks ended October 1, 2017, and a system-wide decrease of 1.4% in same-store sales, Jack in the Box (NASDAQ: JACK) has agreed to sell its Qdoba Restaurant Corporation subsidiary to Apollo Global Management (NYSE: APO) for $305 million in cash. ​

When Jack in the Box acquired Qdoba in 2003, it had just 85 locations in 16 states, with $65 million in system-wide sales. Since then, net units have grown at a compounded 16% annual growth rate, and Qdoba is now the second largest fast-casual Mexican food brand in the US. Qdoba now comprises more than 700 locations in 47 states, the District of Columbia, and Canada, and has more than $450 million in system-wide sales in fiscal 2017.

Jack in the Box management expects to use the proceeds to retire outstanding debt.

​The $305 million consideration represents a 0.67x revenue multiple for the fast-casual chain. The transactions is expected to close by April 2018.