JUST EAT Takes a Bite Out of Australian Market
Plans to acquire Australian and New Zealand online takeaway marketplace Menulog for A$855 million.
JUST EAT plc have announced their proposed acquisition of the entire issued and outstanding capital stock of Menulog Group Limited (“Menulog”) for a total cash consideration of A$855 million.
Menulog is the market leader in the Australian and New Zealand online takeaway marketplace. It has a selection of more than 5,500 unique restaurants and 1.4 million active consumers.
JUST EAT believe that acquiring Menulog will give them access to a market of significant scale. The Australian and New Zealand takeaway delivery market size is estimated at approximately A$3.0 billion (c.£1.6 billion), with online penetration rate estimated at around 22%. These markets have a strong takeaway food culture, a fragmented restaurant market, high levels of disposable income and a high level of ecommerce adoption.
The transaction adds another two markets to those where JUST EAT has the leading market leadership position. Menulog also has a strong underlying business with broadly similar business model to JUST EAT with an average commission rate of 9.8% for the twelve months ended 31 March 2015.
It is currently expected that the consideration will be 100% financed from a proposed equity fundraising. With respect to this, JUST EAT has entered into a standby underwriting agreement with J.P. Morgan Cazenove.
The Equity Fundraising is expected to be launched in mid to late May, following receipt of the approval of the Acquisition by the Foreign Investment Review Board (FIRB) in Australia. Completion of the Equity Fundraising is expected early to mid June 2015.
David Buttress, CEO of JUST EAT plc commented: “Since the time of our IPO last year, we have consistently stated that participating in a disciplined manner in industry consolidation was an important strategic objective for JUST EAT. The acquisition of Menulog, a business with strong leadership in an attractive and fast-growing market, is fully consistent with this approach and will be an important addition to the JUST EAT business. The Menulog founders have together built a great business and I look forward to working closely with Menulog’s CEO and his experienced management team in the coming months.”
Also commenting on the Acquisition, Dan Katz, CEO of Menulog, said: “I am very excited about the prospect of Menulog becoming part of JUST EAT, which has been a real inspiration for us as we have grown in the Australian and New Zealand markets. This proposed acquisition will allow Menulog to benefit from JUST EAT’s experience and know-how, particularly in digital marketing, and enhance our customer service model to drive further growth and efficiencies across the business.”
