Online food delivery service Just Eat has agreed to acquire rival Hungryhouse for an initial sum of £200m.
It may put up a further cash amount of up to £40m depending on Hungryhouse’s performance in the run-up to completion, which will be funded through cash resources and credit facilities.
The acquisition is part of Just Eat’s strategy to accelerate growth and increase its market presence.
Just Eat said the purchase would create a larger customer base for restaurant partners to access, while increasing the breadth of choice on offer to UK consumers through its online platform.
Hungryhouse is expected to generate earnings of £12m to £15m for the latest financial year before depreciation, tax and amortisation, excluding one-off exceptional transaction and integration costs of about £1m.
The acquisition will be subject to approval by the Competition & Markets Authority.
David Buttress, chief executive officer of Just Eat, said: “The UK has long been an engine of growth for Just Eat. While we have significantly expanded internationally in recent years, we have remained focused on building a high-growth, sustainably profitable business domestically. Through this transaction, we would extend our market presence in the UK and sustain high levels of growth given the considerable opportunity in this market.”
Niklas Östberg, CEO of Hungryhouse owner Delivery Hero, said: “The sale of Hungryhouse to Just Eat rationalises our global footprint, and we remain focused on operating market-leading brands, globally. Proceeds from this sale will allow us to pursue further global growth and profitability opportunities, as we have consistently and successfully done in recent years.”
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