Just Eat's acquisition of Hungryhouse given final green light

Just Eat (LON: JE.) has been given the final green light by the Competition and Markets Authority to acquire rival food delivery service company Hungryhouse.

The CMA has "unconditionally cleared" the acquisition from German company Delivery Hero worth £200m, with a further £40m dependant on performance. The transaction is expected to be finalised by 31 January 2018.

Interim Chairman of Just Eat Andrew Griffith said:

''The combination with Hungryhouse will enable us to bring benefits to even more independent restaurants, while improving the service and breadth of choice that we offer consumers. We are therefore pleased with the CMA's decision and look forward to bringing Hungryhouse into the Just Eat family. I would like to thank all the Just Eat team for their hard work in concluding the process with the CMA over the past year".

The deal was first announced in December 2016 but stalled while the CMA undertook a full inquiry to determine whether the deal would hinder fair deals for the companies' restaurant partners.

Just Eat began in Denmark in 2001 and began operating in the UK in 2006, around the same time Hungryhouse began as a startup. After the acquisition completes the Group will have over 37,000 restaurant partners in the UK with around 90% market share.

The seal of approval from the CMA gave the stock a small boost to be trading up 1% at 810p. This represents a 190% price increase since the Group IPO'd in April 2014.

With a market cap of £5.5bn JE trades at a forecast earnings multiple of 36x, double the industry median of 18x. FY17 Net Profit is forecast to reach £112m from Revenues of £521m in FY17, up from £84m and £451m in FY16 respectively.