In what can be considered the largest exit of a single investor in a Brazilian internet company, Prosus, the investment division of South African group Naspers, closed an agreement with Just Eat Takeaway.com to buy its 33.3% stake in Brazilian delivery app iFood.
The all cash deal can reach 1.8 billion euros (or around $1.8 billion). The amount will be paid with a cash installment of 1.5 billion, and the rest is conditioned to performance over the next 12 months. The transaction needs to be approved by Just Eat Takeaway‘s investors and is expected to be completed in the 4th quarter. In case the deal doen´t pass, the company will have to pay a fine of 35 million euros to Prosus.
In a press statement, Just Eat Takeaway said that the amount to be paid by Prosus represents a five times increase in the amount invested throughout the partnership. Just Eat landed in Brazil in 2012 with RestauranteWeb. The delivery app was purchased by iFood in 2014, resulting in a joint venture with Naspers, now Prosus.
With the exit, Prosus and Movile are now the only iFood’s shareholders. In the 2021 financials, published at the end of March, Prosus reported that Movile had 67% of iFood. Prosus has 94% of Movile.
About time!
The deal announced today ends a negotiation that has dragged on since 2020 when Just Eat merged with Takeaway. With the union and the focus on Europe, participation in a business in Brazil no longer made sense for the group. The company is also looking for a buyer for Grubhub, which operates in the US.
“Just Eat Takeaway focuses on improving profitability and having a disciplined capital allocation. The company will retain the transaction amounts on its balance sheet to reinforce and service debt securities close to maturity. The company reaffirms its guidance as presented in the mid-year results on August 2nd,” said the statement.
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By bringing the entire app indoors, Prosus gains strength in its food delivery segment. The company has a presence in 50 countries and apps such as Delivery Hero, Swiggy, Oda, and Flink.
In the year 2021 (which ended on March 31), the food delivery division had revenue of $3 billion, a growth of 77%, representing about 10% of the business as a whole ($35.6 billion, up 24% in one year).
iFood grew 41% in the total amount of sales (GMV) with 758 million orders (up 37%). The company’s main business, food delivery to restaurants, posted revenue of $967 million, up 33% in a year, with a profit of $10 million, a third of what it reported a year earlier.
iFood = tremendous opportunity
“We are very excited to continue to be an active and supportive partner for iFood as the company enters its new phase of innovation and growth,” said Bob van Dijk, Prosus’ CEO, in a statement. According to Larry IIIlg Prosus Food’s CEO, there is great potential for growth in food deliveries to restaurants, and other businesses, such as supermarkets and fast delivery.
“Together, we will build the platform that offers Brazilian consumers, delivery partners, restaurants, and more the best food, grocery delivery, and fintech experience,” said Fabrício Bloisi, founder of Movile and CEO of iFood, in a statement.
Startups reported exclusively in mid-July that iFood had incorporated the MovilePay operation to reinforce the offer of financial services for restaurants. The company also purchased Anota AI to expand its operations to calls made through WhatsApp.
(translation by Gabriela Del Carmen)
