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Thu 15th Dec 2016 - Just Eat to acquire Hungryhouse for £200m, Time Out to open first US market
Just Eat to acquire Hungryhouse for £200m, agrees £66.1m deal for Canadian firm: Just Eat, the market place for online food delivery, has agreed a deal to acquire rival firm Hungryhouse from Delivery Hero for £200m. A further cash amount of up to £40m may also be payable, subject to the performance of Hungryhouse between signing and completion of the transaction. Just Eat said the acquisition was consistent with its “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. Just Eat stated: “The acquisition would generate significant benefits for Just Eat’s restaurant partners and customers. 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 £12m to £15m, excluding one-off exceptional transaction and integration costs of about £1m. The acquisition is expected to be earnings per share accretive in the first full year of Just Eat’s ownership. The acquisition would be funded through cash resources and credit facilities. The acquisition will be subject to approval by the Competition and Markets Authority about which the company will provide further updates as and when appropriate.” Chief executive David Buttress added: “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.” Delivery Hero chief executive Niklas Östberg added: “The sale of Hungryhouse to Just Eat rationalizes 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. We also want to thank the entire Hungryhouse team – this transaction reflects their amazing achievements within the Delivery Hero Group since 2011.” Just Eat has also agreed a deal to acquire Canadian food delivery firm SkipTheDishes for CAD $110m (£66.1m) as it strengthens its platform in North America. With expected revenue of CAD $23.5m for the current year ending December 2016, SkipTheDishes is one of Canada’s largest online food delivery market places and has developed a technologically-advanced delivery platform focused on lower density metropolitan and suburban areas, which are key features of the Canadian market. It has a selection of more than 2,900 restaurants and 350,000 active customers. SkipTheDishes is currently experiencing strong top line growth, with orders for the ten months to October 2016 of 1.6 million, representing year on year growth of 186%. The large majority of SkipTheDishes’ orders are derived from its Canadian footprint. It is also operational in a small number of cities in the US Mid West region. The initial consideration of CAD $110m (£66.1m) is split CAD $100m payable in cash immediately on deal completion and CAD $10m (£6.0m) payable in 12 months in the form of 1,046,601 new Just Eat ordinary shares of £0.01 each. The new Just Eat shares will be issued and listed shortly and held in escrow until the payment date. A further cash amount of up to CAD $90m (£54.1m) may also be payable, subject to certain strict financial targets being met. Buttress said: “The acquisition of SkipTheDishes will materially strengthen Just Eat’s number one position in Canada. Canada is a phenomenally exciting country for online food delivery, with significant runway for growth and a clear opportunity to drive channel shift. SkipTheDishes’ outstanding team, technological know-how and operational excellence has enabled it to develop a business model well-suited to Canada’s unique market conditions. It will complement our existing operations so that Just Eat is best-placed to address this fast-growing market.”

Time Out signs for 17,200 square foot market in Miami, first in US: Time Out Group, the global multi-platform media and e-commerce business that operates food and cultural markets, has signed a conditional lease agreement for a new Time Out Market in Miami. The site, in Drexel Avenue, South Beach, is just off Lincoln Road, Miami Beach’s premier shopping destination. The agreement is subject to planning permission being received on the site. This marks the fourth Time Out Market and the company’s first in the US. It follows the success of the company’s flagship market in Lisbon, which opened in May 2014, and the recently signed conditional leases in Porto and London, which are set to open in the second half of 2017, subject to planning permission. In the first six months of 2016, the Lisbon market reported strong year-on-year proforma revenue growth of 106%, record levels of visitors (1.3 million) and has been Ebitda positive in each month of the current financial year. Time Out Market brings together under one roof the vibe of a city: its best restaurants, bars, shops and cultural experiences, based on Time Out’s editorial curation. The Miami South Beach location is expected to have a footprint of 17,200 square feet, accommodating 320 seats indoors and 120 seats outdoors. The curated mix will showcase 20 food and beverage offerings as well as a cultural space. Time Out Group will provide tenants with the facilities, equipment and support services in exchange for a share of revenues, while bars will be directly managed by the group. The opening of the Time Out Market in Miami South Beach is anticipated during the first half of 2018. With plans for new markets progressing well in further locations globally, the group is making significant progress in rolling out the Time Out Market format which is part of the Group’s growth strategy outlined at the time of its initial public offering. The company believes that the uniquely designed Time Out Market format will further expand its international presence and raise the profile of the brand, which currently has a monthly global digital audience reach of 137 million. Chief executive Julio Bruno said: “Rolling out Time Out Market globally is a key element of our growth strategy and I’m delighted that we have found an absolute top location with high footfall in Miami South Beach for our first-time market entry into the US. Time Out Market in Lisbon is incredibly successful; it’s profitable and popular with both locals and visitors. Adding Porto, London and Miami to this portfolio is a major milestone and proof of our ambition. The Time Out brand, its audience and reach are rapidly growing in the US as we expand our digital, social, mobile and print presence; it’s the perfect moment to open Time Out Market in Miami South Beach.” Time Out Market chief executive Didier Souillat added: “Miami is a fantastic spot for Time Out Market. It is a vibrant city, famous for its arts, culture, nightlife and with a culinary scene that recently has been skyrocketing. People here have a real appetite for newness, quality, theatrical experiences and enjoying life. Our market is set to be right at the heart of South Beach: a uniquely designed venue in a premier shopping destination, close to the iconic Art Deco District, the fabulous beach, and some of the best hotels in this year-round popular destination. This is where we will offer our curation of the city’s best restaurateurs, mixologists and artists.”

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