Waitr Holdings Inc., a fast growing restaurant platform for online ordering and on-demand food delivery, announced that it has signed definitive agreements to acquire Bite Squad, an online restaurant food delivery service, for an aggregate amount of approximately $321.3 million, subject to adjustments, based on the closing price of Waitr’s common stock on December 11, 2018. The purchase price consists of a combination of cash and shares of Waitr common stock.
Founded in 2012 and based in Minneapolis, Bite Squad operates a three-sided marketplace, consistent with Waitr’s business model, which connects more than 11,000 active restaurants with approximately 6,300 W-2 drivers and approximately 889,000 active diners. Bite Squad’s strategy is to be a market leader in nearly all of the markets in which they operate.
“We have followed Bite Squad’s growth and success for many years and believe their mission, business model and growth profile share many similarities to Waitr,” says Chris Meaux, founder and Chief Executive Officer of Waitr. “We believe that a small fraction of the U.S. restaurant industry’s sales are from off-premise online transactions and this is evolving rapidly. This acquisition will help us drive additional growth and provide a step function increase in scale throughout the U.S. in order to better serve that developing market.”
“We are thrilled to join forces with the Waitr team,” adds Kian Salehi, co-founder and Chief Executive Officer of Bite Squad. “I believe Chris and his team share our vision for providing hungry diners with a convenient and fast way to enjoy great food from the best local restaurants and chains.”
Bite Squad has a high growth business model, with 85% year-over-year gross food sales growth and 98% year-over-year revenue growth in Q3 2018.
Strategic Rationale
- The combination will significantly expand Waitr’s scale and footprint across the U.S., serving a total of over 86 markets in more than 500 cities and 22 states;
- Shared strategy to establish a market leadership position in the cities which the Company operates;
- Leverage respective strengths to create a best-in-class organization; and
- Opportunity to realize cost synergies.
Transaction Overview
Waitr has entered into definitive agreements to acquire Bite Squad, subject to customary closing conditions, for an aggregate amount of approximately $321.3 million, subject to certain adjustments, based on the closing price of Waitr’s common stock on December 11, 2018. The purchase price consists of approximately $202.1 million in cash and 10.6 million shares of Waitr’s common stock.
In connection with the acquisition, Waitr entered into a debt commitment letter with Luxor Capital Group, LP, on behalf of Lugard Road Capital Master Fund, LP, and one or more of its funds and/or affiliates (“Luxor”), pursuant to which Luxor will provide senior secured first priority term loans in the aggregate principal amount of approximately $42.1 million at the closing. The proceeds of the term loans will be used to finance a portion of the consideration for the acquisition and for general corporate purposes.
Winston & Strawn LLP is serving as legal counsel and Jefferies LLC is serving as financial advisor to Waitr in connection with the acquisition. Gray, Plant, Mooty & Bennett, P.A. is serving as legal counsel and RBC Capital Markets is serving as financial advisor to Bite Squad. The acquisition is expected to close by the end of January 2019.
