Uber has agreed to buy ezCater for $2.3 billion in cash, moving to bring catering for workplace meals, events and social gatherings to Uber Eats. The deal, announced today, would add a U.S. business that lets organizations order food from more than 140,000 restaurants nationwide. Uber expects the acquisition to close in the coming months, subject to regulatory clearance and the remaining conditions required to complete the transaction.
Uber says the combination will make group food orders easier for customers by pairing ezCater’s experience serving businesses with Uber Eats’ reach among diners and restaurants. Its plans also draw on Uber for Business’s relationships with organizations of different sizes, though a catering launch date remains unspecified. For restaurants, Uber expects the acquisition to generate larger orders and introduce their food to additional customers.
ezCater already handles food orders for meetings and events, as well as ongoing catering requirements for enterprise customers. Businesses can use its tools to coordinate ordering and track their food spending, with customer support available around the clock. Its workplace offerings range from meals for employees to catering for individual meetings, giving Uber a business serving both recurring and occasional food needs.
The financial scale of those orders is substantial: ezCater’s average order value exceeds $400, according to the companies. It generated more than $2.5 billion in Gross Bookings during the preceding 12 months, with year-over-year growth in the high teens. The business is profitable when measured using Non-GAAP Operating Income, and Uber expects the acquisition to improve margins.
Uber also says catering will give couriers using Uber Eats additional opportunities to earn money from deliveries. Dara Khosrowshahi, Uber’s CEO, expects the company’s reach to put ezCater’s service in front of millions more customers. Nihad Rahman, ezCater’s CEO, says his team will bring its catering expertise to Uber’s customers, merchants and couriers.
J.P. Morgan Securities LLC is advising Uber on the financial side of the transaction, while Evercore is advising ezCater. Uber’s legal advisers include Covington & Burling LLP and Freshfields US LLP, with Freshfields handling global antitrust matters. Davis Polk & Wardwell LLP is providing legal counsel to ezCater.
