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(Bloomberg) -- PAR Technology Co. said it would acquire startup Punchh, which makes software for restaurant loyalty programs, for $500 million in cash and stock.
Act III Holdings, which is the investment firm of Panera Bread Co. founder Ron Shaich, and T. Rowe Price Group Inc. will be investing in PAR as part of the deal, according to a statement that confirmed a Bloomberg News report.
PAR rose as much as 19% on the news Thursday, giving the company a market value of about $1.6 billion. Its shares have surged more than 400% in the past year.
It would be the largest deal to date for PAR, according to data compiled by Bloomberg. PAR, founded in 1968, develops software for restaurants that does everything from manage food orders to schedule reservations.
A deal for San Mateo, California-based Punchh would give PAR a foothold in restaurant marketing and customer engagement.
“With the Punchh acquisition, we are building a platform that enables restaurants to scale quickly, own their path to innovation, and take back their guest relationship,” PAR Chief Executive Officer Savneet Singh said.
Singh added in an interview that the deal will help the companies better serve its customers, which are mostly quick-service restaurant chains with more than 30 or 40 stores. PAR competes with companies such as NCR Corp. and Oracle Corp.
Restaurant software companies have gained high valuations despite eateries being shuttered for parts of the pandemic. Olo Inc., which produces restaurant softwares, is trading about 18% above the price of its initial public offering last month Another technology provider, Toast Inc., is also planning a public listing at a more than $20 billion value, according to Dow Jones.
Shaich, the Panera founder, will join the board as an observer, along with Keith Pascal, a partner at Shaich’s firm Act III.
Shaich said in an interview that he remembers from being a restaurant CEO the challenges of trying to implement new technology. He’s worked with PAR before and wanted to be part of a deal to transform the company.
“Par is offering the centerpiece of an operating system which allows all the other technology pieces to come into place for a restaurant,” Shaich said.
Punchh, founded in 2010, operates the software behind customer loyalty programs. Its clients include chains and convenience stores, according to its website.
Punchh is backed by investors including Sapphire Ventures and Adam Street Partners. It has raised about $75 million to date, according to PitchBook.
Goldman Sachs Group Inc. advised PAR while JPMorgan Chase & Co advised Punchh.
(Updates with confirmation of deal starting in first paragraph)
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