Just Eat Makes Bold $140M International Bundle of Acquisitions from Rocket Internet | Global AgInvesting

Just Eat Makes Bold $140M International Bundle of Acquisitions from Rocket Internet

Just Eat Makes Bold $140M International Bundle of Acquisitions from Rocket Internet

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Amid ongoing market conditions that TechCrunch terms the “takeout shakeout”, UK-based Just Eat has acquired operations in Spain (La Nevera Roja), Italy (PizzaBo and hellofood Italy), Brazil (hellofood Brazil), and Mexico (hellofood Mexico) from Rocket Internet for $140 million.

 

After being launched in 2001, these deals mark another step in Just Eat’s rapid global expansion beyond its crowded home market, to a total of 15 international markets.

 

Across its operating markets, Just Eat has shown sales growth of 46%, driving its valuation up to 41 times estimated earnings according to Bloomberg data, compared to U.S.-based GrubHub which is trading at 29 times estimated earnings. And after going public in 2014 at a valuation of $2.4 billion, the company is now reportedly valued at $3.7 billion. However, this meteoric growth has sparked investor concerns. After seeing gains of 60% in 2015, stock values fell by 22% in early 2016 as investors doubt whether this growth is sustainable amid intensifying competition.

 

TechCrunch reports that Rocket Internet has referred to the sold assets as “non-core operations that are not market-leading”, and notes that hellofood Brazil and hellofood Mexico accounted for less than 5% of foodpanda’s revenues last year. And there are signs that point to the fact that Rocket Internet may be selling the assets at a loss, given that hellofood Italy reportedly acquired PizzaBo alone for €55 million.

 

But Just Eat notes that overall, the acquired businesses saw orders grow by 83% in 2015, and it suggests that it will see more success with the operations, projecting that the new businesses will contribute US$7.3 million to its earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2017 and US$14.5 million for 2018.

 

“The acquisitions from Rocket Internet and foodpanda represent a positive step forward for the global online takeaway industry enabling all parties to focus their resources on building bigger and better long term businesses in their key geographies,” said David Buttress, CEO, Just Eat, in a company statement.