In the latest development, Delivery Hero has signed agreements with shareholders, including senior management of Woowa Brothers Corp. (“Woowa”) to expand its footprint in Asia and solidifies its position as the largest global food delivery platform outside of China by a number of orders.
The transaction is valued at an enterprise value of $4 billion (or €3.6 billion) on a cash and debt-free basis, before certain adjustments. At the closing of the Transaction, Delivery Hero will own up to 88% of the share capital in Woowa with the remaining 12% to be held by Woowa management and to be exchanged in Delivery Hero shares over a four-year time horizon, to achieve the 100% ownership.
Niklas Östberg, CEO of Delivery Hero, commented:
We are excited to enter into a strategic partnership with Woowa Brothers, which is at the forefront of innovative technology services and has put Korea on the map in the global online food delivery industry. We fully support Woowa Brothers to continue making investments and innovate for the benefit of the wider industry participants, including consumers, restaurants, employees, and riders. To this end, the joint venture will have the full support of, and access to, Delivery Hero’s global resources.
As part of the transaction, a Joint Venture with the management of Woowa will be established in Singapore. Woowa founder and CEO, Mr. Bongjin Kim, will become the Chairman of the Board of Directors and Executive Director of the Joint Venture to manage the operations of the Delivery Hero group in the Asia Pacific region and oversee expansion in the region.
For the uninitiated, Woowa operates the largest online food delivery service in South Korea, Baedal Minjok, which generated approximately 100 million orders in Q3 2019.
In the nine months of 2019, Woowa grew revenues in Korea by 84% year-on-year to € 301 million, with GMV reaching € 4.6 billion and achieved an EBITDA of ~ € 3 million. Woowa also operates a business in Vietnam, which fulfilled approximately 1.5 million orders in Q3 of 2019.
Bongjin Kim, CEO and Founder of Woowa commented:
The Korean food delivery market is still in the very early stages of development, and offers vast opportunities to grow the customer base and expand into adjacent on-demand services. We are excited to partner with Delivery Hero to leverage their platform and global expertise to facilitate expansion in Asia, as well as to penetrate the high potential Korean market further. The partnership will also help achieve economies of scale to compete against global and domestic IT giants effectively. Together we aim to cultivate and invest in the development of online food delivery services for the benefit of consumers, restaurants, and riders.”
Main image credits: Delivery Hero
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