The announcement Wednesday that a company owned by hospitality industry magnate and Houston Rockets owner Tilman Fertitta is buying Louisiana-based Waitr, the restaurant delivery app, for $308 million is a rare and remarkable example of a homegrown tech startup that makes it big.
The story is all the more remarkable because the deal came together in less than a month, according to Waitr founder and CEO Chris Meaux, who tells Daily Report he started talking to Fertitta’s executive team just three weeks ago.
“I don’t think it has hit me yet,” says Meaux, who celebrated the deal with Fertitta at a Houston Rockets’ game Wednesday night and was flying to New Orleans this afternoon to accept the ACG Louisiana award for emerging growth company of the year. “It’s been 90-to-nothing for the past three weeks. I haven’t settled down to contemplate what has really happened yet.”
What has happened is that Fertitta’s company is paying Meaux and his partners in Waitr $50 million in cash and $258 million in stock in a deal that will take the company public later this year. Meaux will remain chief executive of the Lake Charles-based company and will also be chairman of the board, which Tillman will join as a director.
“We still have a ton of work ahead,” Meaux says. “I think that’s why it hasn’t hit me yet. I know how much work we have to do.”
Meaux says discussions began in mid-April, after his contacts at Fertitta’s restaurant group, Landry’s Inc., reached out to him and asked if he was looking for capital to expand.
Many of the Landry’s restaurants in Louisiana and south Texas are Waitr customers, and Meaux says he speaks regularly to his contacts there so the inquiry was not totally out of the blue. Still, he wasn’t prepared for how quickly it came together.
Within a few days of the initial call, Fertitta’s team flew to Lake Charles, where Fertitta also owns the Golden Nugget Casino and started negotiating. Within a couple of weeks, they had a deal.
“They liked the team and they loved the story and they know us from being a customer so they knew the benefits we provided,” Meaux says. “So when they found out we might be looking for capital they knew time was of the essence.”
No question, Fertitta likes a good story. In addition to his restaurant and casino holdings and NBA team, he stars in his own reality TV show on CNBC, Billion Dollar Buyer, where he gives startup companies an opportunity to pitch him each week on their products or service. The winner gets a contract to sell their wares to one of his restaurants, hotels or casinos.
Meaux is clearly a winner in this deal, as are fans of the Waitr app. Having the financial backing of Fertitta will enable the company to grow much more rapidly, Meaux says. He plans not only to increase the rate at which he adds new markets but to focus on adding more restaurant customers and clients in existing markets.
“We’ll also be able to invest in our technology so it can keep getting better,” he says. “This will open up a lot of opportunities for us.”