_{INTERNATIONAL M&A}

Uber Eats Up Foodpanda

If there is one thing we like here at Buysiders in addition to big deals, money, and occasionally rocks, it’s food.

Keeping with our track record of reporting on deals that ensures everyone gets to the office hungry, Uber has acquired Delivery Hero’s Taiwanese delivery business, Foodpanda for $950 million in cash, one of the largest ever international deals ever done in Taiwan. 

Both companies dominate the delivery space in Taiwan, which could make this a tricky deal from a regulatory perspective, but it is unlikely to draw major antitrust scrutiny.

Delivery Hero released a summary of its strategic rationale for the deal but it is important to note that this is only ~3% of its business. Additionally, Foodpanda was barely breakeven on an EBITDA basis, it makes sense why Uber didn’t disclose a multiple here.

Delivery Hero plans to use the proceeds to reduce net debt by ~30% through a repurchase of its convertible bonds.

As a part of the deal, all UberEats’ and Foodpanda’s Taiwanese merchants, delivery drivers, and consumers will be integrated into one app (Uber Eats). Foodpanda has historically catered to a more local audience while Uber Eats brings in a larger international audience, which means there will likely be limited cannibalization of sales between the two companies.

Closing is expected in 2025, but until then, Delivery Hero will continue to operate Foodpanda as normal. Separately, Uber also has a deal with Delivery Hero to purchase $300 million of ordinary shares, which could signal further collaboration between the firms in the future.

_{LOCAL DEAL OF THE MONTH}

ConocoPhillips Acquires Marathon Oil

It's June, and our resident rock expert has found another significant deal in a sector he cares deeply about.

ConocoPhillips has announced its intention to acquire Marathon Oil in an all-stock deal valued at an enterprise value of $22.5 billion, or ~$17 billion in equity value (Marathon Oil has ~$5.5 billion in debt).

The offer to Marathon Oil represents a ~15% to the share price immediately prior to announcement. Marathon Oil has traded up ~10% on the news, indicating that there is still some anticipated risk to the transaction.

Synergies in commodity businesses are often limited to reducing public company costs and some sales expenses, but this deal might be an exception due to several assets being geographically close.

ConocoPhillips has identified up to $500 million in cost savings, primarily from reducing overhead and the proximity of wells.

Public oil companies must prioritize dividends for investors, who typically dislike reduced payouts. ConocoPhillips has outlined a capital plan to keep shareholders satisfied, including increasing dividends and share buybacks in the near term.

It’s been a wild ride for commodities this year, but a lot of the large scale oil and mining giants have significant capital available. With limited new projects in old commodities, we here at Buysiders expect to see more consolidation across the old economy. It is unlikely that PE funds will get to play a role in this consolidation until companies start spinning off non-core assets, which PE funds should be able to pick up piecemeal.

_{PRESENTED BY RYSE}

Last Chance to Invest Before This Company Becomes a Household Name

What if you had the opportunity to invest in the biggest electronics products as they launched into big-box retail, would you?

Through retail distribution deals with Best Buy, Ring changed doorbells and Nest changed thermostats. Early investors in these companies earned massive returns, but the opportunity to invest was limited to a select, wealthy few.

The game has changed, and for once investors have the option to invest in another smart-home company that’s gearing up through a massive retail rollout.

RYSE has just launched in 100+ Best Buy stores, and you're in luck—you can still invest at only $1.50/share before their name becomes known nationwide.

They have patented the only mass market shade automation device, and their exclusive deal with Best Buy resembles that which led Ring and Nest to their billion-dollar buyouts.

Opportunity closes next week - learn how you can become a shareholder.

_{EXIT OF THE MONTH}

Thoma Bravo Cashes Out: CyberArk Acquires Venafi for $1.5 Billion

Cybersecurity firm CyberArk announced that it will acquire Venafi from Thoma Bravo in a deal valued at ~$1.5 billion. Consideration will consist of $1 billion in cash and $540 million in stock.

One of the more unique aspects of this deal is that Venafi is - allegedly - cashflow positive, which is pretty remarkable for tech companies these days.

Before you get too comfortable in thinking that tech bros have cooled their M&A jets, this deal reflects a multiple of ~10x annual recurring revenue, which is still pretty expensive.

CyberArk has a history of accretive acquisitions though, having done 5 deals since 2015 (excluding this one), and generating significant shareholder value along the way.

Thoma Bravo will hold ~5.6% of CyberArk’s shares after the transaction.

Thoma Bravo originally paid $1.15 billion for Venafi in 2020, but it's unclear how much of that was debt. Therefore, the multiple on invested capital (MOIC) for Thoma Bravo is at least 1.3x but is likely significantly higher in reality.

_{NEWS ROUNDUP}

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