Uber to Acquire Catering Marketplace ezCater for $2.3 Billion in Cash

UBER agreed to acquire ezCater, a U.S. marketplace for catering and workplace meals, in an all-cash transaction valued at $2.3 billion, the companies announced on Tuesday, October 6. ezCater connects businesses with more than 140,000 restaurants and processed more than $2.5 billion in gross bookings over the last 12 months, growing at a high-teens rate year over year, with average orders above $400. ezCater is profitable on a non-GAAP operating basis, and Uber expects the deal to be margin accretive.

The acquisition folds ezCater into the Uber Eats restaurant network and Uber for Business corporate accounts, pushing Uber further into large B2B food orders such as meetings and events. "Catering is a big business, and can be a huge revenue stream for restaurants," CEO Dara Khosrowshahi said. ezCater, founded in 2007 and led by CEO Nihad Rahman, was last valued at $1.6 billion in a December 2021 round led by SoftBank Vision Fund 2, so the price is about 1.4 times that mark.

It is Uber's second large delivery acquisition in under three months, after the July agreement to buy Delivery Hero for $14.8 billion. By comparison ezCater is small: Yahoo Finance estimated it adds about 2% to Uber's annualized delivery bookings, and the $2.3 billion price is under a quarter of Uber's $10.1 billion of trailing free cash flow. The market reaction was muted, with Uber shares down about 0.6% at $69.08 late Tuesday, well below the $100.86 mean price target across 46 analysts in SentiSense data.

The transaction is expected to close in the coming months, subject to regulatory approvals and customary conditions. J.P. Morgan advised Uber and Evercore advised ezCater. What to watch: the regulatory review as Uber expands its delivery footprint, how quickly catering appears inside the Uber Eats and Uber for Business apps, and whether business-focused gross bookings, which grew more than 40% in the second quarter, keep compounding once ezCater's corporate customers are folded in.