Online meal delivery company Just Eat has agreed to purchase Menulog for £445 million (about $687 million), marking its entrance into New Zealand and Australia. Menulog, which has 5,500 restaurants on its platform and 1.4 million active users, claims to be the largest food delivery business in those two countries.
This is the latest in a series of acquisitions Just Eat, which held its initial public offering on the London Stock Exchange last month, has made in order to enter new markets and hold its end in a heated rivalry with GrubHub and Rocket Internet investments FoodPanda and Delivery Hero, which are also aggressively focused on international expansion.
In February, Just Eat bought SinDenlental.Mx to enter Mexico; previously, it entered Spain, France, and Canada through acquisitions.
The restaurant delivery market presents relatively low barriers to entry and a large roster of companies have sprung up since Just Eat, one of the first meal ordering sites, was launched in 2001. Over the last year, however, the sector has begun to consolidate with Just Eat and its main rivals FoodPanda, Delivery Hero, and GrubHub snapping up smaller companies around the world.
Reports earlier this month had pegged Delivery Hero, which is based in Germany, as another potential suitor for Menulog, which made £13.5 million in revenue and £1.2 million of EBITDA in the fiscal year ended March 31.
According to statistics from YouGov and Euromonitor, Australia and New Zealand’s combined food delivery market is worth about £1.6 billion and still has plenty of room for growth because the online penetration rate is just 22 percent.
Just three months ago, Menulog merged with rival EatNow in a bid to protect their market share from encroaching competition as overseas food delivery companies eyed the Antipodes, but it looks like the combined company decided to take a more conciliatory approach.
In a prepared statement, Menulog chief executive officer Dan Katz 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.”