Rapid consolidation in UK online takeaway market
Just Eat plc agreed to buy hungryhouse Holdings Limited (“hungryhouse”), its UK online takeway ordering rival from its German owners Delivery Hero Holding GmbH (“Delivery Hero”) for an initial £200 million.
A further cash amount of up to £40 million may also be payable, subject to the performance of hungryhouse between signing and completion of the transaction.
The company said the Acquisition is consistent with Just Eat’s strategic ambition to accelerate its growth and increase its market presence in every geography in which it operates. hungryhouse is an online food company operating solely in the UK, with a comparable business model to Just Eat.
The Acquisition, is subject to competition clearance from the UK Competition Markets Authority.
Just Eat said it would create an enlarged customer base for restaurant partners to access, while increasing the breadth of choice on offer to UK consumers through Just Eat’s platform.
The combination of the two businesses would also generate compelling economic benefits of scale, with high operating leverage driving material synergies.
On a 2017 pro forma basis, assuming ownership and integration for the full reporting year, Just Eat would expect hungryhouse to generate EBITDA of between £12-15 million, excluding one-off exceptional transaction and integration costs of around £1 million. The Acquisition is expected to be EPS accretive in the first full year of Just Eat’s ownership.
The Acquisition would be funded through cash resources and credit facilities.