Today’s news before decided that Uber was pursuing the acquisition of Grubhub. The global giant that rides this vehicle deserves a multiple of the American food delivery service, making the bond financially feasible, provided that the right price can be found for both parties.
The deal could shake the huge American food delivery market, which is generally not profitable, contested Uber Uber Eats, Grubhub, DoorDash and Postmates services. This combination can create the largest food delivery entity in terms of sales, change leadership in its market and possibly reduce competition.
Let’s elaborate on the agreement in terms of the costs, why Uber has to pay in stock, how much the combined amount is Uber Eats / Grubhub the entity will be compared to its competitors and why the adjusted EBITDA helps us understand how this acquisition can benefit Uber.
Purchase the entire stock?
In normal times, this agreement may be a mixture of cash and shares. However, by 2020, with Uber’s market position as such, it is likely that this will be an all equity transaction. Why? Because of Uber need to save money at almost all costs. The only division that has historically been profitable (riding vehicles to produce highly adjusted profits) is in the tank, with volumes up 80% in April, compared to the year-ago period.
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