As the largest U.S. food delivery company expands into Europe, DoorDash Inc (DASH.N) announced on Tuesday that it will buy Wolt Enterprises OY, based in Finland, in an all-stock deal worth around 7 billion euros ($8.09 billion).
The pandemic-driven surge in demand for DoorDash and similar services is anticipated to subside in the coming months, but most businesses are still losing money as they seek scale, setting the scene for a wave of mergers.
Following Just Eat Takeaway.com’s (TKWY.AS) $7.3 billion acquisition of American rival Grubhub and Uber Inc’s (UBER.N) $2.65 billion acquisition of Postmates Inc last year, DoorDash’s deal would be one of the largest yet in the market.
In after-market trading, DoorDash’s stock jumped roughly 19 percent in response to the purchase, which will allow the business to expand into 22 new nations, including Germany, Serbia, Croatia, Denmark, and Sweden, as well as a revenue beat in the third quarter.
The combined adjusted core profits of Wolt and DoorDash are estimated to be between breakeven to $500 million in 2022, with the merger scheduled to finalize in the first half of the year.
According to DoorDash, over two-thirds of Wolt’s gross order value, which includes the total value of all orders and subscription fees, generates positive contribution profit.
The value of the DoorDash stock issued as part of the acquisition will be $206.45 per share, according to the firms. According to Refinitiv IBES, DoorDash’s third-quarter sales increased 45 percent to $1.28 billion, exceeding expectations of $1.18 billion.
