Uber storms into catering with a $2.3B acquisition of ezCater
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Uber Technologies (UBER) announced that it struck a deal to acquire ezCater, which is a leading U.S. platform for catering and workplace meals. The all-cash transaction was valued at $2.3B.
ezCater is a Boston-based technology company that connects businesses with restaurants and caterers for workplace meals. Its core business is an online catering marketplace, supplemented by tools for recurring employee meals, company-wide food budgets, billing, and restaurant order management. ezCater says it makes it easy for any business to manage its food needs and order from over 140K restaurants nationwide. Its platform supports everything from meetings, events, and recurring enterprise catering needs, with tools to manage ordering and food spend and 24/7 customer support. Of note, ezCater generated over $2.5B in gross bookings over the trailing twelve months, growing high teens year-over-year. The business is profitable on a non-GAAP operating income basis and is expected to be margin accretive. ezCater’s average order values are over $400.
The acquisition will bring together ezCater’s proven catering and B2B expertise, Uber Eats’ global reach among consumers and restaurants, and Uber for Business’s deep relationships with organizations of all sizes. It was noted that restaurants will be able to grow through larger orders and new diners. Customers will be able to find and order food for a group more simply and reliably, from workplace meals to events and social gatherings. In addition, couriers on Uber Eats will have attractive new opportunities to earn.
"Catering is a big business, and can be a huge revenue stream for restaurants," stated Uber (UBER) CEO said Dara Khosrowshahi.
The transaction is expected to close in the coming months, subject to regulatory approvals and other customary closing conditions.
Uber (UBER) edged 0.8% higher in premarket trading.
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