Following months of speculation and activist investor tumult, Amsterdam-based Just Eat Takeaway.com announced its intent to sell Grubhub or explore introducing a strategic partner less than a year after completing its $7.3 billion acquisition of the third-largest U.S. third-party delivery provider.
The news was divulged during JET’s latest quarterly earnings report, where the parent company reported a 1.1 percent drop in total orders compared to the first quarter of 2021—a stat many news outlets highlighted, suggesting that the pandemic-driven delivery boom may be cooling. In North America, the company’s orders declined by five percent during the same period.
“The management board confirms its alignment with shareholders in wanting to both create and realize value from the company’s highly attractive portfolio of assets,” Just Eat Takeaway.com said in its earnings report. “As such, management is currently, together with its advisers, actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub. There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be. Further announcements will be made as and when appropriate.”
While originally hailed as creating the largest global delivery provider outside of China, “with very strong positions in the most important markets in the United States,” JET CEO and founder Jitse Groen was initially bullish about the deal’s potential on both sides of the Atlantic. Amid ongoing pressure to offload Grubhub from an activist investor that started just a few months after completing the acquisition, Groen said JET had no plans to sell Grubhub as recently as February of this year.
TKWY shares rallied nearly 5 percent after news broke about putting Grubhub on the block.
JET reported “higher-than-normal absolute churn” during the first half of 2022, and said “enhancing profitability” is one of its highest priorities throughout 2022, with a clear focus on increasing revenue per order, improving courier costs per order and reducing overhead and operating expenses.
The company added that it continues to strengthen its on-demand grocery delivery efforts, with “significant progress” achieved through new partnerships with grocers in the UK, Canada and the Netherlands.
“After two years of exceptional growth, we maintain the same high level of orders that were processed during the Covid-19 restrictions,” said Groen. “Our priority for 2022 lies in enhancing profitability and strengthening our business. We expect profitability to gradually improve throughout the year, and to return to positive adjusted EBITDA in 2023.”