Will Amazon’s Food Business Appetite Extend to Grubhub?
Amazon's push into the food sector in North America could enter the restaurant pick-up and delivery realm if Wedbush analyst Aaron Turner is correct with his post-Whole Foods takeover analysis, according to Clark Schultz of Seeking Alpha, an online platform that provides financial commentary and market intelligence.
“Turner thinks Amazon will target Grubhub (NYSE:GRUB) with an offer of around $55 per share to give it a network of 9 million active diners and a run rate of $3 billion in food sales. The suggested deal price is 27% higher than GrubHub's closing price last Friday,” wrote Schultz in a June 19 posting.
The combination of Grubhub and Whole Foods businesses working together could generate synergies on the delivery costs side of the equation and provide consumers with the option to receive home delivery of ready-to-eat food and groceries at the same time.
Chicago, Illinois-headquartered Grubhub is ranked as the USA’s leading online and mobile takeout food-ordering platform, with a comprehensive network of restaurant partners and large active diner base. It currently works with more than 55,000 restaurant operators in over 1,100 American cities and towns, plus London, England. Portfolio of brands includes Seamless, AllMenus and MenuPages in addition to Grubhub.
On June 8 Grubhub entered into an agreement for an all-cash transaction to acquire Foodler, one of the largest independent North American online food-ordering companies. Sealing the deal with the Boston-based company, which is subject to certain closing conditions, would extend Grubhub's leadership in New England and add more than $80 million of annualized gross food sales in 2017.
"We're thrilled to bring Foodler's scale and its established diner base in the Northeast to Grubhub," said CEO Matt Maloney. "Its addition will enhance our marketplace – particularly in Foodler's hometown market of Boston – allowing us to connect our diners with an even broader range of top-rated, popular local restaurants.”