Mail.Ru Group Limited (MAIL:LI, hereinafter referred as "the Company" or "the Group"), one of the largest Internet companies in the Russian-speaking Internet market, today announces it has signed the agreement to acquire the remaining 90% of ZakaZaka, the number two food delivery company in Russia. The deal was signed on Friday, April 28th 2017 and is not subject to any third-party approvals with closing to occur shortly.
Mail.Ru Group acquired a minority stake in ZakaZaka as part of the Delivery Club acquisition in November 2016 and increased its stake to 9.91% in March 2017. Now Mail.Ru Group will acquire the remaining 90.09% of ZakaZaka in an all-cash transaction. The total deal value for the 90.09% is USD 18 million giving a total value to ZakaZaka of USD 20 million. Mail.Ru Group will fully consolidate ZakaZaka from the date of closing and will disclose all results on a pro-forma basis going forward to allow for like-for-like comparison.
ZakaZaka is the number two player in the fast growing Russian food delivery market. It currently has around 2,600 connected restaurants and the number of orders reached around 126,000 in March 2017. In FY 2016 revenues amounted to RUB 56 million and in Q1 2017 revenues were RUB 30 million.
Users access the service primarily via ZakaZaka mobile app, which accounts for over 87% of total orders.
Commenting on the acquisition Dmitry Grishin, Co-Founder and Chairman of the Board, said:
“As Russian food delivery market continues to show stable growth, it provides us with further proof that our decision to enter foodtech segment was right. Acquisition of Delivery Club was our first step into the market, and it proved to be a successful one: Delivery Club has displayed very significant growth in all operating metrics. With acquisition of ZakaZaka, we are expanding our leading foodtech market position, and we are excited by the potential of our food delivery business.”
Boris Dobrodeev, Mail.Ru Group CEO (Russia), said:
“Following the very successful acquisition of Delivery Club in November 2016 we are now looking to further consolidate our number 1 position in the market. While Delivery Club orders are broadly 50/50 in terms of Moscow and Saint Petersburg and the rest of the country, 72% of ZakaZaka orders are allocated outside Moscow and Saint Petersburg. As a result this acquisition significantly strengthens the reach of our food delivery business. As with Delivery Club we will look to integrate ZakaZaka into the group quickly. The combination of our network, resources and expertise with both Delivery Club and ZakaZaka will allow us to lead this business to even further success.”
Ruslan Gafurov, ZakaZaka cofounder, said:
“Our cooperation with Mail.Ru Group allows for natural synergy; on one hand, there is Mail.Ru Group’s huge mobile audience and extensive experience in mobile segment; on the other hand, there is ZakaZaka’s great retention rate, strong presence all around Russia and high purchase frequency. We are happy that the effort that went to competing with each other can now be redirected to achieving our common goal: making food delivery market better and more accessible.”
Notes to announcement:
ZakaZaka revenue numbers presented here are prepared based on principles used for the segment financial information of the Company's consolidated operations, i.e. do not include certain adjustments which would be required under IFRS. The accounting principles used in segment financial reporting are described in more detail in the Company's prior announcements.
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