image :  Delivery Hero

Berlin based Delivery Hero has inked a deal to sell its German operations to Netherlands based Takeaway.com for €930 million (about $1.1 billion) consisting of €508 million cash and €422 million worth of Takeaway shares, 18% of the total outstanding shares of the food delivery company.

Takeaway.com has secured a €680 million credit facility for this move, more than enough to cover the cash portion of the transaction, Both companies have agreed to a standstill period of four years following transaction completion during which “Delivery Hero and its subsidiaries, with limited exceptions, shall, in particular, not directly or indirectly in any way effect or cause to effect any increase in its shareholding in Takeaway.com N.V. through any financial instruments or related derivative securities” as part of this deal.

image : Delivery Hero

Delivery Hero’s German operations consisting of marketplaces Lieferheld and Pizza.de, and delivery business foodora are included with this deal which the company says recorded 23 million orders, Gross Merchandise Volume of €462 million and revenues of €76 million for the nine months ending September 2018.

This deal increases Delivery Hero’s cash position to allocate more capital towards investment opportunities across its segments, it’s announcing an upgrade to its investment plan as a result “with an aim to increase investments with a net adjusted EBITDA impact of negative €250 million over the course of 2019.” according to its press release.

image : Delivery Hero

In line with expectations prior to this transaction, Delivery Hero expects to hit revenues between €1.08 billion and €1.15 billion for 2019 with incremental revenues of €45 million in 2019 and €81 million of incremental recurring revenue per year starting in 2020 expected.

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