Meal kit delivery giant HelloFresh sets sights on ready-made meals through Youfoodz takeover

Global meal kit delivery giant HelloFresh looks set to enter the ready-made meals arena by devouring a Brisbane-based company.

Global meal kit delivery giant HelloFresh seeks to take over Youfoodz so it can expand into the ready-made meals arena as competition in the convenient home-dining sector heats up.

Brisbane-based Youfoodz announced to the ASX on Tuesday it had inked a deal with the world’s leading meal-kit company, backing its cash offer of 93 cents per share and advising its shareholders to vote in favour of the scheme.

The bid from the Berlin-founded company represents an 82 per cent premium to Youfoodz’s last closing price of 51 cents and sent it shares rocketing when trading began again, up a whopping 77.9 per cent at 90.8 cents in early trade.

But it’s a loss for those who piled into the initial public offering in December, given they paid $1.50 and their shares have traded well below that level since.

Youfoodz shareholders have been told they don’t need to take any action at this time but to note the wholly cash consideration of the HelloFresh offer provides them “with certainty of value that they might not otherwise achieve by retaining their Youfoodz shares”.

Youfoodz started as a family-owned business, and also sells snacks and drinks.

Investors will have the opportunity to vote on the scheme at a meeting in October.

It’s the latest chapter in a wave of merger and acquisition activity on the ASX, with OMG chief executive Ivan Tchourilov noting a number of sectors were consolidating as larger companies swooped on good-quality strategic assets, some of which were trading much lower versus pre-pandemic levels.

HelloFresh has already scored a massive win, with RGT Capital – the biggest shareholder in Youfoodz with a 57.4 per cent stake – throwing its support behind the $125m deal.

“As a world-leading direct-to-consumer food solutions group, HelloFresh represents a strong strategic partner for Youfoodz,” the takeover target said.

“The transaction combines Youfoodz strength in developing and manufacturing delicious ready-made meals with HelloFresh’s expertise in supply chain management, technology and direct-to-consumer marketing.”

Convenient home dining is a competitive space, with Marley Spoon rivalling HelloFresh and both offering budget alternatives. Picture: EveryPlate

Youfoodz revealed in its quarterly report released in April that it expected slightly lower than forecast full-year net revenue.

It said home delivery customers had surged during initial Covid-19 lockdowns and the momentum continued, but sales to its wholesale customers, including Coles, Woolworths and 7-Eleven, had underperformed.

Youfoodz has been focused on production efficiencies to improve its margins and pouring millions into marketing.

Convenient home dining is a competitive space, with Marley Spoon rivalling HelloFresh and both offering budget alternatives with their Dinnerly and EveryPlate arms respectively.

Originally published as Meal kit delivery giant HelloFresh sets sights on ready-made meals through Youfoodz takeover