Key points
- Uber agreed to buy ezCater for $2.3 billion in cash
- ezCater's average order is more than $400
- The deal still needs regulatory approval
Uber (UBER) agreed to buy US catering platform ezCater for $2.3 billion in cash, the company announced on Oct. 6. The deal would bring workplace meals and large group orders to more customers through Uber Eats and Uber for Business.
"Catering is a big business, and can be a huge revenue stream for restaurants," Uber CEO Dara Khosrowshahi said. "With Uber's reach, we can bring that experience to millions more customers and help restaurants win more of these valuable orders."
ezCater's average order exceeds $400
ezCater connects businesses with more than 140,000 restaurants for catering orders, and its average order is more than $400, according to the release. It processed more than $2.5 billion in gross bookings over the past 12 months, and those bookings are growing in the high teens year over year.
ezCater is also profitable on a non-GAAP operating income basis, Uber said, and Uber expects the deal to improve its margins. Gross bookings measure the total value of orders on a platform, not the revenue the company keeps.
Restaurants would get access to larger orders through Uber's network, and businesses would get more options for workplace meals, events, and other group orders, the companies said.
The deal is expected to close in the coming months
The acquisition still needs regulatory approval and other customary closing conditions. J.P. Morgan Securities is advising Uber, and Evercore is advising ezCater.
Uber shares were at $70.10 in premarket trading at 8:32 a.m. ET on Oct. 6, up about 0.9% from the previous close of $69.48. Uber's top executives bought stock last month. Khosrowshahi bought $10 million worth, and President Andrew Macdonald bought $5.3 million.
