Uber (NYSE: UBER) Expands Uber Eats with ezCater Acquisition

• Uber (NYSE: UBER) plans to acquire ezCater for $2.3 billion, expanding its Uber Eats service into the workplace catering market.
• The deal grants Uber Eats access to over 140,000 U.S. restaurants, generating more than $2.5 billion in annual gross bookings.
• Uber expects ezCater's average orders, exceeding $400, to positively impact its profit margins.

Uber (NYSE: UBER) operates a ride-hailing platform and the Uber Eats delivery service. Citigroup (NYSE: C) maintains a Market Outperform rating on Uber with a hold action. The stock trades at $69.08 at the time of the update.

Uber plans to acquire ezCater for $2.3 billion in cash, as highlighted by Reuters. The deal expands Uber Eats into workplace catering, where businesses order meals for employees and events.

The acquisition would give Uber Eats access to more than 140,000 U.S. restaurants in ezCater’s network, as highlighted by The Wall Street Journal. Those restaurants generate over $2.5 billion in annual gross bookings—the total value of orders placed before expenses are deducted.

Uber expects ezCater’s average orders, which exceed $400, to help improve profit margins, as highlighted by Barron’s. Profit margin is the share of revenue left after costs. At $69.08, Uber is down $0.40, or 0.58%, and has traded between $68.76 and $69.93 during the day.