American Express Acquires Restaurant Booking Platform Tock for $400 Million

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American Express (AmEx) is acquiring the restaurant booking platform Tock from Squarespace for $400 million in an all-cash deal. This acquisition aims to bolster AmEx’s presence in the dining industry, a sector that saw $100 billion in spending on AmEx cards last year. The deal, announced on Friday, will complement AmEx’s 2019 acquisition of the online restaurant reservation platform Resy.

Resy provides AmEx cardholders with special access to select restaurants, including exclusive reservations, early notifications, and cashback on certain bookings. By acquiring Tock, AmEx will integrate an additional 7,000 restaurants, wineries, and other hospitality businesses into its network, enhancing the ability of these establishments to target AmEx’s premium customers, who are known for their high spending habits.

AmEx’s strategy of offering more perks and exclusive experiences is designed to justify higher annual fees compared to its rivals. This approach is crucial for achieving AmEx’s growth targets by appealing to affluent consumers and increasing customer engagement. William Blair analyst Cristopher Kennedy noted that these experiences act as a distribution channel by attracting new customers to the AmEx brand.

In addition to Tock, AmEx is also acquiring Rooam, a contactless payments platform used by restaurants, bars, music venues, and other businesses. The terms of the Rooam acquisition were not disclosed. These acquisitions are expected to support AmEx’s efforts within the small and medium enterprise market, which the company views as lucrative despite a recent slowdown in spending growth in this segment.

Squarespace, a website-design platform, had purchased Tock for approximately $400 million in 2021, the same amount it will receive from AmEx in the current deal. This transaction will streamline Squarespace’s operations as it prepares to be taken private by Permira in a nearly $6.9 billion deal.

So far this year, AmEx shares have increased by 23%, outperforming the benchmark S&P 500 index, which has risen by nearly 15% over the same period.