After pulling off a record $2.2 billion purchase of the Houston Rockets in October 2017, Texas billionaire Tilman Fertitta was on the hunt for his next big deal in 2018.
The hospitality industry magnate and star of CNBC’s Billion Dollar Buyer had formed a special purpose acquisition company, or SPAC, two years earlier called Landcadia Holdings Inc. SPACs, known as blank-check companies, raise money through an IPO to acquire an unspecified target company, typically within two years.
With the clock ticking, Fertitta had until mid-2018 to make a deal or return the money to investors.
One month before the deadline, Fertitta’s team zeroed in on a tech startup, a Louisiana firm that’s been growing steadily since its launch in 2015, as Business Report details in its latest cover package.
It was Waitr, the app-based food delivery platform based in—of all places—Lake Charles.
The Louisiana startup had a strategy unique from its competitors: staking out market share by dominating smaller cities that bigger players wouldn’t touch. It was a clever play that paid off generously for Waitr, which started with just its CEO and a few students. The company saw explosive growth, creating a stunning success story for a tech underdog like Louisiana.
Many of Fertitta’s Landy’s restaurants were already Waitr customers, and they heard the company was looking for capital to expand in 2018. One of Landry’s executives who works with Waitr urged Fertitta’s team to look into it as an opportunity for the SPAC.
“Waitr was the best in class,” says Steve Scheinthal, Landry’s executive vice president. “They were a leader in their markets.”
Scheinthal called Waitr CEO Chris Meaux in April to set up a meeting. Within days, his team hopped into Fertitta’s helicopter, flew from Houston to the Golden Nugget Casino in Lake Charles and showed up at Waitr’s doorstep to hear Meaux and his team pitch their company.
Fertitta’s reps liked what they heard and threw out a potential buyout offer. But Meaux didn’t bite, saying it was too low. Scheinthal then asked everyone to leave the room except Meaux, and the two businessmen negotiated one-on-one as Meaux went over the numbers, explaining why Waitr was worth more.
Scheinthal raised the offer: $308 million. Meaux stepped out to consult his team, walked back in and shook Scheinthal’s hand.
“Someone asked me the other day, ‘So when you started the company, did you think you and four college students could convince a Super Bowl MVP and the Billion Dollar Buyer to be involved in your company?’” Meaux says, a smile sweeping across his face.
“I said, ‘Well, when you put it that way, hell no—I never expected that.’”
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