Jitse Groen is making an embarrassing M&A round trip. The chief executive of Dutch food delivery company Just Eat Takeaway.com said he’s considering a full or partial sale of U.S. arm Grubhub, less than one year after buying it for $7.3 billion. It couldn’t come at a worse time.
Grubhub could be worth about 3 billion euros in January. Yet since then valuations of delivery groups have fallen, partly due to fears that rising inflation will hurt consumers. Applying a 1.1 times 2021 sales multiple to Grubhub, the average of European peers Deliveroo and Delivery Hero, would spit out an enterprise value of perhaps just under 2 billion euros, according to a Breakingviews estimate.
There may be a silver lining. If Groen can exit the tricky U.S. market, the rest of his business may start to look a little more appetising to a merger partner. Groen’s dealmaking days may just be getting started.- Just Eat Takeaway.com is exploring a sale of Grubhub, the U.S. business it bought for $7.3 billion in 2021, the food delivery company said on April 20.
- Chief Executive Jitse Groen said on a call that the company hired advisers and launched a formal process to explore a sale, but warned there was no certainty that would translate into a transaction. On the same day, the company warned that the gross value of transactions it processed in 2022 would only grow by around 5%, slower than previous guidance of around 15% growth.
- Just Eat Takeaway shares have fallen more than 70% in the past 12 months. The shares of rivals DoorDash, Delivery Hero and Deliveroo are down 26%, 73% and 56% respectively over the same period.Register now for FREE unlimited access to Reuters.comOpinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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