- DoorDash shares jumped 19% on Wednesday on a deal to buy Wolt for $8.1 billion.
- Finland-based Wolt operates in 23 countries which will expand DoorDash’s global presence.
- DoorDash posted a rise in third-quarter revenue above $1 billion but its per-share loss was wider than expected.
DoorDash shares soared Wednesday after the company reached an all-stock deal to buy Wolt, with the €7 billion ($8.1 billion) agreement to buy the Finnish food-delivery company supporting a global expansion.
DoorDash separately reported third-quarter revenue that surpassed expectations but a wider loss than anticipated by analysts.
The stock price surged as much as 19% to $228 in premarket trading then pared the gain to 16%. The stock has risen about 35% during 2021.
Wolt has “superb consumer loyalty and retention rates,” said DoorDash in a Wednesday statement about the transaction that should close in the first half of 2022. Wolt’s platform operates in 23 countries under a team of more than 4,000 employees.
“By joining forces, we believe we will accelerate our product development, bring greater focus to each of our markets, and improve the value we provide to consumers, merchants, as well as Dashers and couriers around the world,” said DoorDash CEO Tony Xu, in the statement. Xu established DoorDash in 2013 along with then-fellow Stanford University students Andy Fang and Stanley Tang.
DoorDash equity issued as part of the deal will be valued at $206.45 per share, based on DoorDash’s 30-day volume-weighted average price as of November 3.
Wolt, founded in 2014 in Helsinki, offers delivery services from restaurants, grocery and other local stores in its home country, across Europe including Germany and the Czech Republic, and in Israel and Japan. DoorDash also operates in Japan, and the deal will expand its operations beyond the US, Canada, and Australia. DoorDash runs in more than 7,000 cities. Absent from the list of countries is the UK, where rival UberEats operates.
The deal should add to DoorDash’s growth in gross order value in 2022 and the company foresees proforma combined adjusted EBITDA of up to $500 million next year. The agreement includes a new retention pool of about €500 million reserved for Wolt management and employees.
Wolt’s co-founder and CEO Miki Kuusi will report to Xu.
Meanwhile, DoorDash said third-quarter revenue increased to $1.28 billion from $879 million a year ago, higher than the Refinitiv estimate of $1.18 billion. Its per-share loss was $0.30, wider than expectations of a loss of $0.26 but narrower than the year-ago loss of $0.96 a share.
The idea for DoorDash stemmed from a 2012 meeting with a macaroon store manager in Palo Alto, California, who needed help delivering orders.