American Express buys restaurant reservation platform Tock for $400 million

American Express has purchased Squarespace-owned restaurant reservation platform for $400 million to expand its foothold in the dining industry, a category that accounted for $100 billion in spending on its cards last year.

The all-cash deal, unveiled on Friday, will build on the credit card giant’s acquisition of online restaurant reservation platform Resy in 2019.

Resy helps AmEx cardholders get special access to certain restaurants, including exclusive reservations, early notifications or cash back on certain reservations made through the platform.

The acquisition of Tock will add 7,000 restaurants, wineries and other hospitality businesses to the AmEx network, and will allow restaurants to target premium AmEx customers who are typically heavy spenders.

The credit card giant often offers more perks to justify charging higher annual fees than its competitors, a strategy seen as crucial to achieving AmEx’s growth goals by helping it attract affluent consumers and boost customer engagement.

“These experiences help serve as a distribution channel, as they attract new customers to the brand,” William Blair analyst Christopher Kennedy wrote in a note.

AmEx is also buying Rooam, a contactless payments platform used by restaurants, bars, music venues and other businesses, for an undisclosed sum.

Kennedy wrote that the acquisitions should support the company’s efforts in the small and medium enterprise market. AmEx views the sector as profitable despite the recent slowdown in its spending growth.

Website design platform Squarespace paid about $400 million for Tock when it bought it in 2021, about the same amount it will receive from the sale.

The deal will make Squarespace smaller as it prepares for Permira to go private in a deal worth about $6.9 billion.

So far this year, American Express shares have jumped 23%, compared with a nearly 15% jump for the benchmark S&P 500 index as of Thursday’s close.

– Niket Nishant, Reuters