The big restaurant tech supplier PAR Technology is facing investor pressure to consider strategic alternatives.
In a letter last week to the company’s board, Voss Capital argued that PAR’s stock price does not reflect its true value as a modern, large-scale restaurant tech supplier.
Houston-based Voss owns 13.2% of PAR’s stock. The company’s stock price has dropped more than 74% over the past 12 months.
“The public markets are severely penalizing software companies, especially those that prioritize long-term terminal value building over immediate cash flows,” Voss wrote.
New Hartford, New York-based PAR is one of the largest POS and tech providers in the industry, with more than 140,000 restaurant locations using its technology across brands like Burger King, Arby’s and Carl’s Jr. It also serves convenience stores. Last year, PAR’s revenue increased by 30%, to $455.5 million, while it posted a net loss of $84.7 million.
PAR entered the restaurant industry in the late ’70s with a POS system and went public in 1982. Over the past decade, it has recast itself as an all-around tech provider for every part of a restaurant’s operations. More recently, it has focused on making AI the backbone of its technology.
It has relied heavily on M&A to expand, adding Punchh for loyalty software in 2021 and Menu for online ordering the following year, among other deals.
Voss noted that the devaluation of PAR’s stock has hampered its ability to do M&A. And investors did not take well to its recent acquisition of software provider Bridg for $27 million. PAR’s stock fell steeply after the deal was announced in January.
On a February earnings call, PAR CEO Savneet Singh said M&A has become less of a priority for the company “given where our stock price is.”
Voss said that PAR would be able to better pursue its strategy away from the public market, noting that other restaurant tech companies have received higher valuations elsewhere.
One example would be Olo, the online ordering company that went private in a $2 billion sale to Thoma Bravo last year. Like PAR, Olo’s stock struggled, but the sale price represented a 65% premium on its value when the deal was announced.
“We believe a robust appetite remains for high-quality, data-rich software platforms like PAR that sell to large enterprises,” Voss wrote.
A PAR sale would be impactful for the restaurant tech market given the company’s large footprint, future-focused strategy and history of M&A.
PAR had not responded to a request for comment as of publication time.
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