Just Eat (LON:JE) has this morning announced the proposed acquisition of Menulog Group. The online takeaway service will finance the of A$855 million (£445 million) deal with the proceeds of an issue of new equity.
Highlights from the company statement;
JUST EAT plc ("JUST EAT" or the "Company"), the world's leading online and mobile marketplace for takeaway food, announces the proposed acquisition of the entire issued and outstanding capital stock of Menulog Group Limited ("Menulog") for a total cash consideration of A$855 million (£445 million)(the "Acquisition") to be financed from the proceeds of an issue of new equity.
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. Menulog has seen rapid growth in order volume with the business achieving year-on-year order volume growth of 96% for the three months ended 31 March 2015.
The JUST EAT Directors believe there is a compelling rationale for the acquisition of Menulog which will allow it to acquire a market leader in a market of significant scale.
The Acquisition is classified under the Listing Rules as a Class 2 transaction and accordingly a shareholder vote is not required. It is currently expected that the consideration will be 100% financed from a proposed equity fundraising in the form of a placing and open offer (the "Equity Fundraising"). With respect to the Equity Fundraising, JUST EAT has entered into a standby underwriting agreement with J.P. Morgan Cazenove pending the launch of the Equity Fundraising and publication of the Prospectus.
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, Chief Executive Officer 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."