Del Taco Restaurants — Levy Acquisition — SPAC Merger (March 2015)
29 slides from Del Taco Restaurants's SPAC merger presentation, Mar 12, 2015
Slide 1: Investor Presentation March 2015
Investor Presentation March 2015
Slide 2: Disclaimer and Forward-Looking Statements
This Investor Presentation (the “Investor Presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of Del Taco Holdings, Inc . (“ Del Taco” or the "Co
Slide 3: Non-GAAP Measures and Additional Information
Del Taco believes that these non - GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Del Taco’s financial condition and results of operations . Del Taco’s management uses these non - GAAP measures to
Slide 4: Today's Presenters
Today’s Presenters Management Background Paul J.B. Murphy , III President & CEO ▪ Joined Del Taco in 2009 ▪ Former CEO & President of Einstein Noah Restaurant Group ▪ More than 30 years of restaurant experience with a focus on limited service chains and a proven track record for brand growth, strate
Slide 5: Larry Levy: Proven Leader & Experienced Restaurateur
Larry Levy: Proven Leader & Experienced Restaurateur Larry Levy Co - Founded Levy Restaurants in 1978 and Grew It from a Single Chicago Delicatessen into an International Food Service Company that Generates over $ 1 Billion Dollars in Revenue . Operational and Investing Experience Deep restaurant
Slide 6: Levy Acquisition Corp. to Merge with Del Taco
Levy Acquisition Corp. to Merge with Del Taco On March 11, 2015, Levy Acquisition Corp. (NASDAQ:“LEVY”) entered into a definitive agreement to acquire Del Taco through the merger of a subsidiary into Del Taco. LEVY will continue to be listed on NASDAQ post business combination Acquisition has be
Slide 7: Agenda
Agenda ▪ Investment Highlights ▪ Financial Overview ▪ Transaction Overview ▪ Appendix 6
Slide 8: Investment Highlights
Investment Highlights ▪ Leading Mexican QSR Chain with Loyal Following ▪ Successful New Brand Strategy “Combined Solutions” in Early Stages ▪ Our Position: We Start with Fresh & Serve with Value ▪ Our Food: Un Freshing Believable® ▪ Our Menu: Diverse Menu Targets Broad Consumer Base ▪ Our Price: Hig
Slide 9: Del Taco at a Glance
Del Taco at a Glance (1) Based on unit count. ▪ #2 Mexican QSR concept in the U.S. (1) ▪ Regional icon on West Coast ▪ Differentiated menu showcases a mix of Mexican - inspired cuisine and American classics Our Concept Positioned for Growth ▪ Attractive balance of traffic and check growth driving sa
Slide 10: Brand Positioning: We Start with Fresh & Serve with Value
Brand Positioning: We Start with Fresh & Serve with Value Del Taco Combines the Best Attributes from both QSR and Fast Casual. We call this QSR+ Quick Service: Speed of Service and Value Proposition Fast Casual High Quality Food and Dining Experience Strong Value Proposition Convenience & Speed Driv
Slide 11: Attractive Positioning in the Growing Mexican Category
Mexican QSR System - wide Units (2) Attractive Positioning in the Growing Mexican Category System wide Sales ($millions) $7,800 $656 $658 $330 $192 $303 $93 $78 5,769 546 405 402 174 174 156 129 Source : Industry data provided by Technomic Top 500 report . (1) Represents Del Taco’s U.S. footprint. E
Slide 12: Significant Unit Growth Opportunity
Significant Unit Growth Opportunity Source: Public company filings. (1) Based on internal analysis and research conducted by third parties . (2) Excludes 1 franchised restaurant in Guam. Percentage of Domestic Potential Unit Growth Remaining 92% 83% 82% 73% 68% 60% 56% 28% 0% 25% 50% 75% 100% 1,600
Slide 13: Accelerating Financial Performance Across the System
Source: Public company filings. Note: Weighted QSR average includes Burger King, Jack in the Box, Kentucky Fried Chicken, McDonald’s, Popeye’s, Sonic, Taco Bell and Wendy’s . Weighted averaged based on unit count. Accelerating Financial Performance Across the System 1.5% 0.9% 0.4% 2.0% 0.4% 3.8% 4.6
Slide 14: Accelerating Operations Improvements
Accelerating Operations Improvements Best Practice Improvement Fresh Value Pricing Platform New Engagement Platform & Advertising Campaign Guest Experience Measurement Menu and New Product Development Ambience Shake - Up Reimaged Stores with New Fresh Image Create a dramatically better guest experie
Slide 15: Our Food: Fresh and High Quality
Our Food: Fresh and High Quality High quality food made - to - order from a working kitchen ─ Marinated chicken freshly grilled in restaurant ─ 100% real cheddar cheese grated fresh daily ─ Whole pinto beans slow cooked in our kitchens ─ Salsa made from scratch with fresh tomatoes and cilantro 14
Slide 16: Priced at a Discount to Both QSR and Fast Casual Competitors
Priced at a Discount to Both QSR and Fast Casual Competitors… $10.93 $10.17 $7.20 $6.83 $6.49 Sources: Average check data is from public company filings (JACK) and NPD (CMG and Taco Bell). Our Price: Compelling Value Proposition Average Check 1
Slide 17: High Quality Food at a Tremendous Value
High Quality Food at a Tremendous Value Source : Self - conducted survey of Los Angeles restaurant prices as of February 2015 and are subject to change. Freshly grilled chicken, seasoned black beans, diced onions, fresh cilantro, and handmade pico de gallo, served over Fresca Lime rice Pollo Asado G
Slide 18: Our Menu: Something for All Budgets and Dining Occasions
Our Menu: Something for All Budgets and Dining Occasions Tiered Menu Strategy Designed to Drive Traffic and Grow Average Check Caters to diverse preferences and budgets, capturing a broad consumer base irrespective of macroeconomic climate Leverages branded platforms to provide consumers with st
Slide 19: Advertising Campaign: Un Freshing Believable
Advertising Campaign: Un Freshing Believable® High Quality Food Fresh Ingredients Working Kitchen Value Affordability Speed & Convenience Changing the Conversation Surrounding Del Taco from Price Value to Quality… We Start with Fresh… …And Serve with Value “I’ve been going to Del Taco for years and
Slide 20: Creating a Better Guest Experience
Creating a Better Guest Experience We significantly improved overall guest satisfaction and generated higher likelihood to return and recommend scores among targeted guest segments through operations - focused Combined Solutions elements Best Practice Improvement Accelerating Operations Improvemen
Slide 21: Brand Messaging Supported by Substantially Reimaged System
Brand Messaging Supported by Substantially Reimaged System Ambience Shake - Up: High impact restaurant reimage program focused on critical guest - facing elements ─ Exterior refresh and interior upgrades signaled change and communicated Fresh, Quality and Value 100% of Company - owned restaurant
Slide 22: Financial Overview
Financial Overview Det Taco
Slide 23: Historical Financial Summary
Historical Financial Summary $345.6 $356.3 $380.8 $14.5 $14.7 $15.2 $360.1 $371.0 $396.0 2012 2013 2014E Franchise Revenue and Sublease Income Company Restaurant Sales Total Revenue ($millions) $59.6 $64.8 $71.2 17.2% 18.2% 18.7% 2012 2013 2014E Restaurant Contribution and Margin ($millions) $52.0 $
Slide 24: Transaction Overview
Transaction Overview 9
Slide 25: Transaction Overview: Designed to De-Risk Merger
Transaction Overview: Designed to De - Risk Merger Transaction Summary Completion of Step 1 expected in mid - to - late March Preliminary proxy statement expected to be filed with SEC in mid - to - late March Shareholder Vote and Completion of Step 2 expected in June 2015 Timing Del Taco has
Slide 26: Illustrative Transaction Terms
Illustrative Transaction Terms Step 1 - Sources and Uses (Estimated) Capitalization (1) (Estimated) Pro Forma Ownership (1) (Estimated) 8.5% 11.2% 31.0% 9.3% 40.0% Levy Family Existing Del Taco Shareholders Step 1 Investors Private Placement Investors LAC Public Shareholders (5) (1) Excludes founder
Slide 27: Comparable Company Analysis
Comparable Company Analysis EV / 2015E Adjusted EBITDA <9.0x 20.1x 17.7x 17.5x 16.5x 14.5x 13.3x 12.4x 114.1x 40.6x 34.7x 10.6x 18.8x 13.1x 11.6x 0.0x 15.0x 30.0x 45.0x 60.0x 75.0x Primary Median: 16.5x High Growth Fast Casual Median: 37.7x Other QSR Median: 13.1x 120.0x Sources: Capital IQ and equi
Slide 28: Appendix
a = eae, Appendix
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($Thousands) Fiscal Year Ended 2013 2012 Net Loss $(6,539) $(8,222) Non - GAAP adjustments: Provision for income taxes 80 1,940 Interest expense, net 35,613 38,291 Depreciation and amortization 19,851 17,699 EBITDA $49,005 $49,708 Stock based compensation expense (1) 1