Axios Pro Exclusive Content

Grubhub draws interest from the PE crowd, including Apollo

Jun 10, 2022
Illustration of a smiley face  plastic bag, but the smiley face is replaced with the money-tongue emoji.

Illustration: Maura Losch/Axios

Grubhub is attracting early interest from Apollo Global Management and other private equity suitors, according to Bloomberg.

Why it’s the BFD: Apollo’s interest in the food delivery service could prove a prelude to a flurry of deals in the alternative lending space as traditional sources of capital (banks) dry up and PE firms like Apollo have billions of dollars in dry powder to tap.

Of note: Grubhub will likely fetch offers close to $1 billion, far below Just Eat’s acquisition price tag, Bloomberg reports.

Context: Grubhub was put on the auction block by owner Just Eat in April, less than a year after the Amsterdam-based Just Eat bought it for $7.3 billion.

  • While the pandemic helped usher in a rush of customers, Just Eat is seeing a growth slowdown while also being exposed to the dive in technology stocks’ values.
  • The company is also facing internal pressure as its chairman stepped down and it's looking into a complaint about the operating chief's personal conduct.
  • Moreover, shareholders, including Cat Rock Capital and Lucerne Capital, have been more critical of management.

Catch up fast: Apollo itself has been active in the retail M&A world.

  • The firm, alongside Mukesh Ambani’s Reliance Industries, made a binding offer for the Walgreen Boots British pharmacy arm yesterday, the Financial Times and Bloomberg reported.
  • It is also a part of Franchise Group’s deal to buy Kohl’s, in which Apollo will lend $2 billion to the Vitamin Shoppe parent to help it finance the transaction, the NYPost reported.
  • Apollo has also thrown its support to Peloton, bolstering the connected exercise bike maker’s balance sheet with $750 million of new debt alongside Blackstone and public loan investors.

The bottom line: The unwinding of the merger represents a slowdown in the food delivery consolidation spree it spurred as companies reckon with consumers’ no-longer-homebound lives.

Apollo declined to comment.

Go deeper