Uber Technologies is acquiring US workplace catering platform ezCater for $2.3 billion in an all-cash transaction. The move aims to expand Uber Eats into group catering and workplace meals, combining their respective strengths in the market.
Uber Technologies has agreed to acquire US workplace catering platform ezCater for $2.3 billion in an all-cash transaction, as the ride-hailing and food delivery company seeks to expand Uber Eats into group catering and workplace meals.
Strategic Combination of Strengths
Uber, in a press release on Tuesday, said that the acquisition will combine ezCater’s catering and business-to-business expertise with Uber Eats’ consumer and restaurant network and Uber for Business’ relationships with organisations, the companies said in a joint announcement.
Financial Profile and Market Value
ezCater enables businesses to order food from more than 140,000 restaurants across the US and manages workplace meals, meetings, events and recurring catering requirements. The platform generated more than $2.5 billion in gross bookings over the trailing 12 months, growing at a high-teens rate year-on-year.
The business is profitable on a non-GAAP operating income basis and is expected to be margin accretive to Uber, according to the companies. Its average order value exceeds $400, significantly positioning catering as a higher-value segment for restaurants and delivery partners.
Projected Benefits and Expansion
“Catering is a big business, and can be a huge revenue stream for restaurants,” Uber CEO Dara Khosrowshahi said, adding that Uber’s reach could bring ezCater’s catering experience to more customers and help restaurants capture more such orders.
The transaction is expected to provide restaurants with access to larger orders and new customers, while allowing consumers to order food for workplace gatherings, events and social occasions through a more integrated platform. Uber also expects the deal to create additional earning opportunities for its delivery couriers.
ezCater CEO Nihad Rahman said the company would bring its catering and B2B expertise into Uber’s broader ecosystem of customers, merchants and couriers.
The acquisition comes as Uber looks to broaden its food delivery business beyond individual meal orders. By combining ezCater’s established workplace catering platform with Uber Eats’ existing consumer and restaurant reach, the company expects to expand access to group food orders while strengthening the value proposition for restaurant partners.
Closing Details and Advisors
The transaction is expected to close in the coming months, subject to regulatory approvals and other customary closing conditions. J.P. Morgan Securities is serving as financial adviser to Uber, while Evercore is advising ezCater. Covington & Burling and Freshfields US are providing legal counsel to Uber, while Davis Polk & Wardwell is advising ezCater. (ANI)
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