Delivery Hero to Expand Asian Operations Through a Strategic Partnership with Woowa
Berlin, December 13, 2019 – Today, Delivery Hero SE (“Delivery Hero” or “Group”) signed agreements with shareholders, including senior management, of Woowa Brothers Corp. (“Woowa”). The Transaction reinforces Delivery Hero’s commitment to expand into fast-growing Asia and solidifies its position as the largest global food delivery platform, outside of China by number of orders.
Woowa operates the largest online food delivery service in South Korea, Baedal Minjok, which generated approximately 100 million orders in Q3 2019. Woowa predominantly operates a marketplace business model called “Baemin Service” which accounts for 97% of orders in nine months. In the financial year ending December 31, 2018, Woowa grew revenues in Korea by 96% year-on-year to € 242 million, with GMV reaching € 4.0 billion and achieved an EBITDA of € 46 million. In the nine months of 2019, Woowa grew revenues in Korea by 84% year-on-year to € 301 million, with GMV reaching € 4.6 billion and achieved an EBITDA of ~ € 3 million. Woowa also operates a business in Vietnam which fulfilled approximately 1.5 million orders in Q3 of 2019. , 
As part of the transaction, a Joint Venture with the management of Woowa will be established in Singapore. Woowa founder and CEO, Mr. Bongjin Kim, will become the Chairman of the Board of Directors and Executive Director of the Joint Venture to manage the operations of the Delivery Hero group in the Asia Pacific region and oversee expansion in the region.
The Transaction is valued at an enterprise value of US$ 4.0 billion (or € 3.6 billion) on a cash and debt free basis, before certain adjustments. Delivery Hero is expected to achieve 100% ownership in Woowa over time for a consideration of approximately a US$-equivalent € 1.7 billion in cash and € 1.9 billion in shares based on a 20-day VWAP of € 47.47.2 At closing of the Transaction, Delivery Hero will own up to 88% of the share capital in Woowa with the remaining 12% to be held by Woowa management and to be exchanged in Delivery Hero shares over a four year time horizon, to achieve the 100% ownership.
The new shares to be issued from the existing authorization by Delivery Hero will be up to 40.1m equating to approximately 17.5% of Delivery Hero shares outstanding post Transaction.  The closing of the Transaction is subject to certain conditions including financing and regulatory approvals and is expected to occur in H2 2020.
Niklas Östberg, CEO of Delivery Hero, commented: “We are excited to enter into a strategic partnership with Woowa Brothers, which is at the forefront of innovative technological services and has put Korea on the map in the global online food delivery industry. We fully support Woowa Brothers to continue making investments and innovate for the benefit of the wider industry participants, including consumers, restaurants, employees and riders. To this end, the joint venture will have the full support of, and access to, Delivery Hero’s global resources.”
Bongjin Kim, CEO and Founder of Woowa, commented: “The Korean food delivery market is still in the very early stages of development, and offers vast opportunities to grow the customer base and expand into adjacent on-demand services. We are excited to partner with Delivery Hero to leverage their platform and global expertise to facilitate expansion in Asia, as well as to further penetrate the high potential Korean market. The partnership will also help achieve economies of scale to effectively compete against global and domestic IT giants. Together we aim to cultivate and invest into development of online food delivery services for the benefit of consumers, restaurants and riders.”
- Woowa is the largest online food delivery platform in South Korea
- Woowa generated 365 million orders over the last twelve months ended September 30, 2019, up 61% year-over-year.
- Woowa’s platform includes approximately 111 thousand ad-paying restaurants as of September 30, 2019.
- Opportunity to unlock a large and underpenetrated market
- The Korean online food delivery market is still nascent, with the majority of consumers still ordering over the phone, which provides an opportunity to penetrate a total addressable market of € 83 billion in Foodservices and € 192 billion in Groceries over the next decade. 
- Ability to leverage Delivery Hero’s technology platform, global expertise and best practices to improve Woowa’s service offering for the benefit of customers, restaurants, employees and riders
- Delivery Hero offers a strong track record of global best practice sharing and expertise that can be applied in Korea to benefit all stakeholders.
- Further roll out of “own delivery”, including leveraging Delivery Hero logistics platform to improve the customer experience and decrease delivery times.
- Support the move into adjacent on-demand services and vertical integration such as “dark stores” to provide consumers with greater choice.
- Further restaurant technology including the expansion of cloud kitchens.
- Further expanding leadership in Asia
- The Joint Venture creates a platform to tackle attractive investment opportunities in the Asia-Pacific region and to further expand Delivery Hero and Woowa’s Asian footprint.
- The Transaction underpins Delivery Hero’s position as an attractive investment opportunity
- The Transaction increases Delivery Hero’s exposure to one of its key growth regions – Asia and reinforces its position as the largest global food delivery platform, outside of China by number of orders.
- The Transaction is valued at an enterprise value of US$ 4 billion (or €3.6 billion)2 on a cash and debt free basis, before customary adjustments.
- Delivery Hero is expected to achieve 100% ownership in Woowa over time for a consideration of approximately USD-equivalent of € 1.7 billion in cash and approximately € 1.9 billion in shares based on a 20-day VWAP of € 47.47.2
- Delivery Hero has contractually agreed to acquire an economic stake of approximately 82% in Woowa, with the remaining approximately 6% of Woowa shareholders being approached post announcement. Woowa’s management will continue to own approximately 12% with agreed liquidity events over the course of the subsequent four years at agreed terms to be settled in Delivery Hero shares.5
- In total, Delivery Hero will issue up to 40.1 million shares, equating to approximately 17.5% of Delivery Hero shares outstanding post Transaction based on a 20-day VWAP of € 47.47. Approximately 31.2 million shares will be delivered at closing and additional approximately 8.9 million shares will be delivered over a four year time horizon.3
- The share component is subject to certain adjustments including customary dilution protections and certain downside protection. A certain portion of the share component of the consideration that the financial shareholders will receive at closing has a guaranteed minimum share price protection, and a small portion of the share component that the management shareholders will receive over the course of two to four years after closing is subject to a full guaranteed share price protection and would be settled in cash.
- The cash consideration will be financed via a combination of equity, equity-linked instruments and debt at closing.
- The Joint Venture will make investments in Korea to expand product offering and develop new technologies. Baedal Minjok and Delivery Hero’s local brands will continue to operate separately and independently in Korea following the transaction closing.
- Delivery Hero commits to support innovation in Korea and the rest of Asia through a US$ 50 million technology fund to develop and cultivate innovative online food delivery services for the benefit of consumers, restaurants, employees and riders
- Delivery Hero continues to adhere to its global strategy of empowering highly experienced, entrepreneurial, founder-led management teams. Following the completion of the transaction, Mr. Bongjin Kim, CEO and Founder of Woowa, will serve as the Chairman of the Board of Directors and an Executive Director of the Joint Venture, and will become a member of the Global Advisory Board of Delivery Hero, to contribute to its leadership on a global scale.
Conditions, Transaction Timeline and Advisors:
- Closing of the Transaction is subject to certain conditions including regulatory approval and financing of the transaction.
- Delivery Hero will hedge its US$-exposure through a customary hedging instrument.
- Based on the currently available information, Delivery Hero expects the Transaction to close in H2 2020.
- In connection with this Transaction, Morgan Stanley is acting as exclusive financial advisor to Delivery Hero, and Bae, Kim & Lee LLC, Kim & Chang, Sullivan & Cromwell LLP and WongPartnership LLP are acting as legal advisors.
Conference Call and Webcast Details:
Niklas Östberg (CEO and Co-Founder), Emmanuel Thomassin (CFO), Duncan McIntyre (Global Head of Strategy) and Maryia Berasneva-McNamara (Head of Investor Relation) will host an analyst and investor conference call to discuss the Transaction at 10:30am CET / 9:30am GMT on 13 December 2019. The audio webcast can be followed via https://webcasts.eqs.com/delivery20191213.
An on-demand replay will be available on the corporate website following the presentation. The accompanying presentation can be downloaded on the Company’s website, via the following link:
About Delivery Hero
Delivery Hero is one of the leading global online food ordering and delivery marketplaces. The company maintains number one competitive market positions, in terms of restaurants, active users and orders, and online and mobile platforms, across 34 out of 41 countries in Europe, the Middle East & North Africa (MENA), Latin America and Asia-Pacific. Delivery Hero also operates its own delivery service primarily in over 400 cities around the world. The Company is headquartered in Berlin, Germany and has over 22,000 employees.
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WKN: A2E4K4; ISIN: DE000A2E4K43
Woowa operates South Korea’s leading online food delivery platform under its brand called “Baedal Minjok.” Woowa ceaselessly works to innovate the food-tech industry through, amongst others, crowd-sourcing rider system, robotics technology, and virtual kitchens; recently, Woowa launched an instant grocery delivery service called ”B Mart”, which provides grocery delivery services under 30 minutes. Since launch in 2010, Woowa grew to attract more than 8 million monthly active users and is expected to transact a gross merchandise value (“GMV”) of more than KRW 8 trillion this year.
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The presentation contains forward looking statements, other estimates, opinions and projections with respect to anticipated future performance of Delivery Hero SE (“Forward-looking Statements”). These Forward-looking Statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “aims”, “plans”, “predicts”, “may”, “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These Forward-looking Statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding Delivery Hero SE’s intentions, beliefs or current expectations concerning, among other things, Delivery Hero SE’s prospects, growth, strategies, the industry in which it operates and potential or ongoing acquisitions. By their nature, Forward-looking Statements involve significant risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking Statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Similarly, past performance should not be taken as an indication of future results, and nor representation or warranty, express or implied, is made regarding future performance. The development of Delivery Hero SE’s prospects, growth, strategies, the industry in which it operates, and the effect of acquisitions on Delivery Hero SE may differ materially from those made in or suggested by the Forward-looking Statements contained in this presentation or past performance. In addition, even if the development of Delivery Hero SE’s prospects, growth, strategies and the industry in which it operates are consistent with the Forward-looking Statements contained in this presentation or past performance, those developments may not be indicative of Delivery Hero SE’s results, liquidity or financial position or of results or developments in subsequent periods not covered by this presentation. Any Forward-Looking Statements only speak as at the date of this press release is provided to the recipient and it is up to the recipient to make its own assessment of the validity of any Forward-looking Statements and assumptions. No liability whatsoever is accepted by Delivery Hero SE in respect of the achievement of such Forward-looking Statements and assumptions.
 Financials and KPIs as provided by Woowa under Korean GAAP; Audited for 2016, 2017 and 2018; Unaudited for Orders and GMV as well as financials for interim periods
 All numbers converted at EUR/KRW exchange rate of 1,321.49 and EUR/USD of 1.1087 where applicable
 Additional shares might be issued in conjunction with Woowa‘s existing and future employee option program
 2030E market size; Delivery Hero estimates
 Percentages subject to certain adjustments