Jonathan Lennon’s Pleasant Lake Partners has recently disclosed a stake in Del Taco Restaurants Inc (NASDAQ:TACO), which amasses 11.5% of the company’s outstanding stock. Del Taco Holdings, a California-based restaurant chain specializes in American and American-style Mexican foods, recently merged with a subsidiary of Levy Acquisition Corp., creating a new company, Del Taco Restaurants Inc (NASDAQ:TACO). According to the filing, Pleasant Lake holds 4.46 million shares of Del Taco Restaurants Inc (NASDAQ:TACO).
New York-based Pleasant Lake Partners is an activist hedge fund co-founded by Jonathan Lennon in 2012. Lennon previously worked as a general stock analyst at John Thaler’s JAT Capital prior to launching his own firm. Lennon employs a concentrated approach to invest in global stocks with a focus on consumer, industrial/natural resources, and media companies. At the end of March, the value of Pleasant Lake’s public equity portfolio stood at $109.6 million. Pleasant Lake’s latest 13F revealed that, during the first quarter, the investor had a strong focus on consumer stocks, which represent over 70% of its equity portfolio. The fund’s top holdings are represented by Famous Dave’s of America Inc. (NASDAQ:DAVE), Hemisphere Media Group Inc (NASDAQ:HMTV), and Houghton Mifflin Harcourt Co (NASDAQ:HMHC).
Recently, Pleasant Lake disclosed upping its position in MagnaChip Semiconductor Corporation (NYSE:MX) to 3.39 million shares. The activist stake accounts for 9.95% of the company’s outstanding common stock. Korea-based MagnaChip Semiconductor Corporation (NYSE:MX) is a designer and manufacturer of analog and mixed-signal semiconductor products for consumer, computing, communication, industrial, automotive and IoT applications.
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Levy Acquisition Corp., a blank check company, was formed in 2013 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. The company completed its initial public offering (IPO) in November 2013, offering of 15 million units, each unit consisting of one share of common stock and one-half of one warrant. Following the completion of merger with Del Taco, Levy Acquisition became Del Taco Restaurants.
The merger was announced by Levy Acquisition and Del Taco in March. As a first phase of the merger, the Levy family and a group of investors acquired $120 million worth of Del Taco common stock. Net proceeds from this investment helped repay $111.2 million of high-interest subordinated indebtedness. Upon closing of the merger, Del Taco repaid an additional $68.6 million of senior debt. With the nominal redemptions by Levy Acquisition shareholders as part of the merger, Levy Acquisition will acquire $60 million worth of Del Taco stock from legacy Del Taco shareholders for cash, instead of Levy Acquisition shares. This limits the dilution of Levy Acquisition shareholders to the maximum extent possible under the terms of the merger agreement, according to a statement by Del Taco.
Headquartered in Lake Forest, California, Del Taco was founded in 1964 by Ed Hackbarth and David Jameson. Together with franchises, Del Taco operates about 550 restaurants in 16 states. Del Taco Restaurants Inc (NASDAQ:TACO) is planning to expand into new markets, and wants to achieve a goal of 2,000 restaurants.
For its fiscal first quarter ended March 24, Del Taco posted a net loss of $4.9 million, versus a loss of $1.9 million a year earlier. The company was able to increase its total revenue by 8.9% on the year to $94.4 million. Revenue growth is attributed to the increase in company’s restaurant sales and franchise revenue, according to the company.
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