Grubhub Rival Waitr to Go Public through Merger with Landcadia Holdings
For investors in online food delivery, it’s tempting to feel late to the party. But for those who do a little extra digging, there is still a chance for a real bargain.
Meet Waitr, an online food delivery company that pairs up with full-service restaurants to offer diners a streamlined experience from their smartphones or computers. The company was among the first to provide its own delivery staff to restaurants and focuses on underserved markets with populations of 50,000 to 750,000.
Waitr plans to be listed on Nasdaq later this year after it is acquired by Landcadia Holdings (ticker: LCA), a blank-check company or SPAC that raised money to find a target. The deal has been approved by both boards and the key hurdle is getting the majority of LCA shareholders who vote to vote in favor of the deal.
A key attraction of Waitr is that it’s fairly priced – for now. Investors who buy LCA stock now are effectively paying the value of the $250 million in cash the company raised, or about $10 a share. Shares of Grubhub, the biggest player in the game, meanwhile, have risen 158% in the last 12 months.
In terms of valuation, Waitr looks like a far better deal than Grubhub. Indeed, if the deal goes through, investors in LCA would own Waitr at an enterprise value, adjusted for cash, of $388 million. That’s a multiple of 6.0 to 6.5 times 2018 sales projections and 3.0 to 3.2 times 2019 sales projections. By contrast, Grubhub trades on multiples of 12.3 times consensus 2018 estimates and 9.6 times 2019 estimates.
For the complete report on Waitr, please visit IPO Edge.
John Jannarone, Editor-in-Chief