PRESENTATION OF INFORMATION
|
6
|
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
|
8
|
LETTER TO SHAREHOLDERS
|
10
|
PART I CONVOCATION OF EXTRAORDINARY GENERAL MEETING
|
11
|
PART II EXPLANATORY NOTES FOR EXTRAORDINARY GENERAL MEETING
|
15
|
PART III EXPLANATORY STATEMENT
|
23
|
PART IV RISK FACTORS
|
35
|
PART V KEY TRANSACTION DOCUMENTS
|
43
|
PART VI HISTORICAL FINANCIAL INFORMATION RELATING TO GRUBHUB
|
72
|
PART VII UNAUDITED PRO FORMA FINANCIAL INFORMATION RELATING TO THE ENLARGED GROUP
|
81
|
PART VIII ADDITIONAL INFORMATION
|
96
|
PART IX DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISORS
|
117
|
PART X DEFINITIONS
|
119
|
APPENDIX GRUBHUB US GAAP HISTORICAL FINANCIAL INFORMATION
|
127
|
Announcement of the Transaction
|
10 June 2020
|
Publication of this Circular, including the Convocation of Extraordinary General Meeting
|
25 August 2020
|
Record Date | 9 September 20201 |
Latest time and date for Just Eat Takeaway.com Shareholders to register attendance at the Extraordinary General Meeting
|
17:30 CET on 30 September 2020
|
Latest time and date for Just Eat Takeaway.com Shareholders to submit voting instructions electronically in respect of the Extraordinary General Meeting
|
17:30 CET on 30 September 2020
|
Latest time and date for Just Eat Takeaway.com Shareholders to submit a physical form of power of attorney in respect of the Extraordinary General Meeting
|
17:30 CET on 30 September 2020
|
Extraordinary General Meeting to approve the Transaction and authorize the issue of Just Eat Takeaway.com Shares
|
14:00 CET on 7 October 2020
|
Targeted date for publication of the Prospectus
|
Q1 2021
|
Targeted date for effectiveness of the Form F-4
|
Q1 2021
|
Grubhub Stockholder Meeting to approve the Transaction
|
H1 2021
|
Completion of the Transaction
|
H1 2021
|
Admission to listing and trading of New Just Eat Takeaway.com Shares on Euronext Amsterdam
|
H1 2021
|
Admission of New Just Eat Takeaway.com Shares to listing on the FCA’s Official List and to trading on the London Stock Exchange’s Main Market
|
H1 2021
|
Admission of the New Just Eat Takeaway.com ADSs to listing and trading on the NYSE or the NASDAQ
|
H1 2021
|
1
|
After processing of all settlements on that date.
|
1. |
Opening and announcements
|
2. |
Resolutions in relation to the Transaction
|
(A) |
Approval of the Transaction*
|
(B) |
Delegation to the Management Board of the right to issue shares and/or to grant rights to acquire shares in connection with the Transaction*
|
(C) |
Delegation to the Management Board of the right to exclude or limit pre-emptive rights in connection with the Transaction*
|
(D) |
Appointment of Matthew Maloney as a member of the Management Board*
|
(E) |
Appointment of Lloyd Frink as a member of the Supervisory Board*
|
(F) |
Appointment of David Fisher as a member of the Supervisory Board*
|
(G) |
Approval of a supplement to the remuneration policy of the Management Board in respect of Matthew Maloney*
|
3. |
Any other business
|
4. |
Closing of the meeting
|
● |
by telephoning Equiniti on 0371 384 2030 from within the UK or on +44 (0)121 415 7047 from overseas. Lines are open 08:30 to 17:30 (UK time) Monday to Friday (excluding public holidays in England and Wales); or
|
● |
by writing to Equiniti at Aspect House, Spencer Road, Lancing, BN99 6DA, United Kingdom.
|
(A) |
the authorization of the Management Board will only be valid for a period of 18 months, as from the date of the EGM; and
|
(B) |
the authorization of the Management Board will be limited to 233,297,041 shares (representing 157% of the total share capital in issue (excluding treasury shares) as at 21 August 2020, being the latest practicable date prior to publication
of this Circular); and
|
(C) |
the authorization of the Management Board may only be used in connection with the Transaction, including to satisfy any obligations pursuant to the Transaction in respect of employee stock option plans; and
|
(D) |
any issue of New Just Eat Takeaway.com Shares and/or the granting of rights to acquire New Just Eat Takeaway.com Shares pursuant to this authorization will be subject to the approval of the Supervisory Board.
|
(A) |
the authorization of the Management Board will only be valid for a period of 18 months, as from the date of the EGM; and
|
(B) |
the authorization of the Management Board to limit or exclude pre-emption rights may only be used in respect of issuances of Just Eat Takeaway.com Shares and/or the granting of rights to acquire Just Eat Takeaway.com Shares as provided for
under agenda item 2(b); and
|
(C) |
any resolution of the Management Board to limit or exclude pre-emption rights will be subject to the approval of the Supervisory Board.
|
Name:
|
Matthew Mayer Maloney
|
Age:
|
44
|
Nationality:
|
United States of America
|
Current position:
|
CEO of Grubhub
|
Previous positions:
|
Classified Ventures (2000-2004); Bachelor of Science, Michigan State University (1998); Masters of Computer Science, Michigan State University (2000); Masters of Business Administration, University of Chicago
(2010)
|
Other (board) positions:
|
Executive director of Grubhub; Member of the Advisory Board of the University of Chicago Booth School of Business Polsky Center for Entrepreneurship; Member of Chicago NEXT; Member of the Board of Trustees of
the Museum of Science and Industry in Chicago; Member of the board of 1871.
|
Motivation:
|
Matthew Maloney is nominated for appointment as a member of the Management Board in connection with the Transaction. Matthew Maloney has extensive experience in the food delivery industry as the founder and
CEO of Grubhub. Under Matthew Maloney’s leadership, Grubhub has grown its active diner network to more than 27 million users, who can order from more than 300,000 restaurants in over 4,000 U.S. cities. The Supervisory Board therefore
nominates Matthew Maloney for appointment for a term ending at the end of the annual general meeting of the Company to be held in 2021, in accordance with article 7.2 of the Articles.
|
Name:
|
Lloyd Frink
|
Age:
|
55
|
Nationality:
|
United States
|
Current position:
|
Co-founder, president and executive chairman of the board of Zillow Group, Inc.
|
Previous positions:
|
Expedia, Inc. (1999-2004); Microsoft (1988-1999); Bachelor of Arts, Stanford University (1987)
|
Other (board) positions:
|
Non-executive director of Grubhub
|
Motivation:
|
Lloyd Frink is nominated for appointment as a member of the Supervisory Board in connection with the Transaction. Lloyd Frink is qualified to serve on the Supervisory Board because of his extensive background
and experience with Internet-based companies, including experience in marketing products to consumers through the Internet. The Supervisory Board therefore nominates Lloyd Frink for appointment for a term ending at the end of the annual
general meeting of the Company to be held in 2021, in accordance with article 7.6 of the Articles.
|
Name:
|
David Fisher
|
Age:
|
51
|
Nationality:
|
United States
|
Current position:
|
Chairman, Chief Executive Officer and President of Enova International Inc.
|
Previous positions:
|
optionsXpress (2004-2012); Potbelly Sandwich Works (2001-2004); RBC Mortgage (2000-2001); Prism Financial (1998-2001); Bachelor of Science, University of Illinois at Urbana-Champaign (1991); Doctor of Law, Northwestern University (1994)
|
Other (board) positions:
|
Non-executive director of Grubhub; non-executive director of Innerworkings, Inc.; non-executive director of FRISS; Member of the Board of Trustees of the Museum of Science and Industry in Chicago
|
Motivation:
|
David Fisher is nominated for appointment as a member of the Supervisory Board in connection with the Transaction. David Fisher is qualified to serve on the Supervisory Board because of his valuable
managerial, accounting and financial reporting experience and the insights he brings as a chief executive officer of a public company, a former chief financial officer for a number of companies and a member of the board of directors of public
companies. The Supervisory Board therefore nominates David Fisher for appointment for a term ending at the end of the annual general meeting of the Company to be held in 2021, in accordance with article 7.6 of the Articles.
|
(A) |
Base salary. The Supervisory Board, based on a proposal of the Remuneration Committee, may set a base salary for 2021 of up to $745,500. Further annual increases are
determined by the Supervisory Board, based on a proposal of the Remuneration Committee, and are, as is currently provided in the Company's existing remuneration policy for the Management Board, restricted by the yearly Dutch retail price
index inflation. Payments may take place on a bi-weekly basis.
|
(B) |
Benefits. The Supervisory Board, based on a proposal of the Remuneration Committee, may provide Mr. Maloney the opportunity to participate in broad-based health,
welfare, vacation and fringe benefit plans offered to employees in the United States generally.
|
(C) |
Pension. The Supervisory Board, based on a proposal of the Remuneration Committee, may, subject to the overall maximum allowance currently provided for in the Company's
existing remuneration policy for the Management Board, provide Mr. Maloney the opportunity to participate in a defined contribution retirement plan (US 401(k)) whereby the Company matches a portion of Mr. Maloney's contributions towards
that plan.
|
(D) |
Short Term Incentive ("STI"). Mr. Maloney may be offered an STI consistent with the terms, including performance measures,
set forth in the existing remuneration policy for the Management Board. The STI for Mr. Maloney may be set to be a cash-only incentive, paid annually.
|
(E) |
Long Term Incentive ("LTI"). Mr. Maloney may be provided the opportunity to participate in a new long term incentive plan
to be adopted by the Company, which may be on similar terms to the Grubhub Inc. 2015 Long-Term Incentive Plan, as last amended in 2020 (the "New US LTI Plan"). LTI awards may be granted in the form of restricted stock units and/or stock options. The maximum per annum value of the LTI grant may be set at an amount of up to 1010% of annual base salary, with no maximum at vesting
being applicable. LTI grants can be made subject to solely time-based vesting criteria, in which case they may vest over a four-year period in quarterly and/or annual instalments. The foregoing approach to LTI grants, in both grant size
and structure, is not uncommon for U.S.-based companies. The Supervisory Board, based on a proposal by the Remuneration Committee, may determine that on vesting and release or the exercise of options, the released shares will be issued
or transferred to Stichting Administratiekantoor Takeaway.com (“STAK”) to hold for Mr. Maloney's benefit, and STAK will issue him depositary
receipts representing such Shares. The Supervisory Board, based on a proposal of the Remuneration Committee, may determine that LTI awards are not subject to a holding requirement.
|
(F) |
Engagement, termination and severance. Mr. Maloney may be engaged based on a contract with the Company, a subsidiary of the
Company or a combination thereof. Mr. Maloney may be offered termination and severance terms reflective of the terms of his current engagement with Grubhub, which includes a thirty-day notice period for both the Company (for a termination
without “Cause”) and Mr. Maloney (for a resignation without “Good Reason”). “Cause” and “Good Reason” will each have the meaning given to such terms in Grubhub’s Executive Severance Plan. In the event Mr. Maloney resigns for "Good
Reason", an additional notice from Mr. Maloney may be required to enable the Company to attempt to cure any facts giving rise to Mr. Maloney’s “Good Reason” claim. The following severance may be set to be payable if Mr. Maloney's
engagement is terminated by the Company without “Cause” or Mr. Maloney resigns for "Good Reason": (i) 12 months of annual base salary (increased to 18 months if within 12 months after Completion), (ii) 12 months of continued health
benefits at the same cost as an active employee (increased to 18 months if within 12 months after Completion), (iii) target bonus times 1.5 (only if within 12 months after Completion), (iv) a pro rata target bonus (only if within 12
months after Completion), (v) vesting of all equity awards (only if within 12 months following the Completion) and (vi) a three-month period to exercise any vested equity awards (increased to a one-year period if within 12 months after
the Completion). The severance amounts above may be payable in equal instalments on regular payroll dates over a twelve month period following the date of such termination (or in a lump sum on the first payroll date following the
effective date of the general waiver and release executed in connection with such termination if within 12 months after Completion). The enhanced severance benefits described above in connection with Completion would also be payable if
Mr. Maloney’s employment were terminated without Cause or for Good Reason within 45 days before or 12 months after a subsequent change in control transaction (as defined in Grubhub’s Executive Severance Plan). Mr. Maloney’s employment
contract may provide for a “280G best net cutback” provision, which would reduce certain of his remuneration if necessary to mitigate certain adverse U.S. tax consequences.
|
Management Board:
|
Registered office:
|
Jitse Groen (Chief Executive Officer)
Brent Wissink (Chief Financial Officer)
Jörg Gerbig (Chief Operating Officer)
Supervisory Board:
Adriaan Nühn (Chairman of the Supervisory Board)
Corinne Vigreux (Vice-Chairman of the Supervisory Board)
Gwyn Burr (Member of the Supervisory Board)
Jambu Palaniappan (Member of the Supervisory Board)
Ron Teerlink (Member of the Supervisory Board)
|
Oosterdoksstraat 80
1011 DK Amsterdam
The Netherlands
|
1. |
Introduction
|
2
|
The Enlarged Group processed almost 600 million orders in FY 2019 worth a gross merchandise value of nearly €14 billion, generating revenues of €2,726 million on a pro forma basis and Adjusted EBITDA of €388
million on a pro forma basis, exceeding competitors such as Uber Eats, Delivery Hero, Doordash and Postmates
|
3
|
Members of the Just Eat Takeaway.com Supervisory Board do not hold any Just Eat Takeaway.com Shares.
|
2. |
Summary of the principal terms of the Transaction
|
(A) |
prior to the General Meeting approving the Transaction, the Merger Agreement is terminated by Just Eat Takeaway.com in order to accept a superior proposal from an alternative bidder;
|
(B) |
prior to the General Meeting approving the Transaction, the Merger Agreement is terminated by Grubhub in certain circumstances where the Management Board and Supervisory Board cease to recommend the Transaction; or
|
(C) |
the Merger Agreement is terminated:
|
(i) |
by either Just Eat Takeaway.com or Grubhub where, subject to certain exceptions, the Transaction has not been completed on or before 10 June 2021 (or 10 September 2021 if extended in accordance with the Merger Agreement) or where the
General Meeting does not approve the Transaction; or
|
(ii) |
by Grubhub following a material breach of its terms by Just Eat Takeaway.com,
|
(A) |
prior to the Grubhub stockholder approval, the Merger Agreement is terminated by Grubhub in order to accept a superior proposal from an alternative bidder;
|
(B) |
prior to the Grubhub stockholder approval, the Merger Agreement is terminated by Just Eat Takeaway.com in certain circumstances where the board of directors of Grubhub ceases to recommend the Transaction; or
|
(C) |
the Merger Agreement is terminated:
|
(i) |
by either Just Eat Takeaway.com or Grubhub where, subject to certain exceptions, the Transaction has not been completed on or before 10 June 2021 (or 10 September 2021 if extended in accordance with the Merger Agreement) or where the
Grubhub stockholder approval is not obtained; or
|
(ii) |
by Just Eat Takeaway.com following a material breach of its terms by Grubhub,
|
3. |
Background to and reasons for the Transaction
|
4
|
The Enlarged Group processed almost 600 million orders in FY 2019 worth a gross merchandise value of nearly €14 billion, generating revenues of €2,726 million on a pro forma basis and Adjusted EBITDA of €388
million on a pro forma basis, exceeding competitors such as Uber Eats, Delivery Hero, Doordash and Postmates
|
5 |
Just Eat Takeaway.com defines Pro Forma Adjusted EBITDA as profit or loss for the period before income tax, depreciation, amortization, impairment, finance income and expenses, foreign exchange results, share-based payments, share of
results of associates and joint ventures, gains on disposals of unconsolidated subsidiaries and other businesses and acquisition related restructuring, transaction and integration costs. Further information on the manner in which Just Eat
Takeaway.com calculates its Pro Forma Adjusted EBITDA is set at Part VII (Unaudited Pro Forma Financial Information relating to the Enlarged Group) of this document. Pro Forma
Adjusted EBITDA is a financial measure that is not calculated in accordance with IFRS. Pro Forma Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and
presented in accordance with IFRS. Just Eat Takeaway’s Pro Forma Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Pro Forma Adjusted EBITDA in the same
manner.
|
6 |
On 6 July 2020, Uber Technologies, Inc. and Postmates Inc. announced that they had reached a definitive agreement under which Uber is to acquire Postmates.
|
4. |
Integration
|
5. |
Information about Just Eat Takeaway.com and Grubhub
|
6. |
Current trading and outlook
|
7
|
Just Eat Takeaway.com defines Adjusted EBITDA as profit or loss for the period before depreciation, amortization, finance income and expenses, share-based payments, share of results of associates and joint ventures, acquisition related
transaction and integration costs and income tax expense. Further information on the manner in which Just Eat Takeaway.com calculates its Adjusted EBITDA is set out in the 2019 Annual Report, which is incorporated by reference into this
document. Adjusted EBITDA is a financial measure that is not calculated in accordance with IFRS. Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated
and presented in accordance with IFRS. Just Eat Takeaway’s Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Adjusted EBITDA in the same manner.
|
8 | Grubhub defines Adjusted EBITDA as net income (loss) adjusted to exclude acquisition, restructuring and certain legal costs, income taxes, net interest expense, depreciation and amortization and stock-based compensation expense. Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP. Grubhub’s Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Adjusted EBITDA in the same manner. |
Q2 2020
|
Q2 2019
|
% change
|
||||
Revenue
(in $ millions)
|
459.3
|
325.1
|
41
|
|||
Active Diners
|
27,475,000
|
20,288,000
|
35
|
|||
Gross Food Sales
(in $ millions)
|
2,324.8
|
1,459.3
|
59
|
|||
Daily Average Orders
|
647,100
|
488,900
|
32
|
(a) |
Grubhub’s withdrawal of the Grubhub FY 2020 Guidance
|
(b) |
Reassessment of the Grubhub FY 2020 Guidance is not necessary
|
9
|
Grubhub includes all revenue generating orders placed on the Grubhub Platform in this metric; however, revenues are recognized on a net basis for the Grubhub commissions from the transaction, which are a
percentage of the total Gross Food Sales for such transaction.
|
7. |
Costs and risks relating to the Transaction
|
8. |
Extraordinary General Meeting
|
1. |
Opening and announcements
|
2. |
Resolutions in relation to the Transaction
|
(A) |
Approval of the Transaction*
|
(B) |
Delegation to the Management Board of the right to issue shares and/or to grant rights to acquire shares in connection with the Transaction*
|
(C) |
Delegation to the Management Board of the right to exclude or limit pre-emptive rights in connection with the Transaction*
|
(D) |
Appointment of Matthew Maloney as a member of the Management Board*
|
(E) |
Appointment of Lloyd Frink as a member of the Supervisory Board*
|
(F) |
Appointment of David Fisher as a member of the Supervisory Board*
|
(G) |
Approval of a supplement to the remuneration policy of the Management Board in respect of Matthew Maloney*
|
3. |
Any other business
|
4. |
Closing of the meeting
|
9. |
Action to be taken
|
10. |
Further information
|
11. |
Financial advice
|
12. |
Recommendation
|
1. |
RISKS RELATING TO THE TRANSACTION
|
● |
the approval of the Merger Agreement and the transactions contemplated thereby and the authorization of the Managing Directors to issue the New Just Eat Takeaway.com Shares by holders of a majority of the votes validly cast by holders of
Just Eat Takeaway.com Shares;
|
● |
the approval of the Merger Agreement by holders of a majority of the outstanding Grubhub Shares entitled to vote as of the Grubhub record date;
|
● |
the approval for listing of the New Just Eat Takeaway.com ADSs on the NYSE or the NASDAQ (subject to official notice of issuance);
|
● |
the approval for admission of New Just Eat Takeaway.com Shares to listing on the FCA’s Official List and to trading on the London Stock Exchange’s Main Market, and to listing and trading on Euronext Amsterdam, in each case to the extent
any Just Eat Takeaway.com Shares are then listed on such exchange;
|
● |
obtaining approval from CFIUS without the imposition of any terms, conditions or consequences that would reasonably be expected to result in a material adverse effect on the Enlarged Group;
|
● |
the absence of any legal restraints that prevent, make illegal or prohibit Completion or the issuance of the merger consideration;
|
● |
declaration by the SEC of the effectiveness of the registration statement on Form F-4, the registration statement on Form F-6 relating to New Just Eat Takeaway.com ADSs and the registration statement on Form 8-A relating to the
registration under the Exchange Act of the New Just Eat Takeaway ADSs to be issued as the merger consideration (and the absence of any stop order suspending the effectiveness of such registration statements or any proceedings seeking such a
stop order);
|
● |
the filing of the Prospectus and this Circular with the AFM and FCA, in each case if then applicable, the approval of such Prospectus by the AFM and FCA and the publishing of this Circular and the Prospectus, in each case, in accordance
with applicable rules and regulations;
|
● |
accuracy of the representations and warranties made in the Merger Agreement by the other party, subject to certain exceptions based on a material adverse change standard; and
|
● |
performance in all material respects by the other party of the obligations required to be performed by it at or prior to Completion.
|
● |
Just Eat Takeaway.com may experience negative reactions from the financial markets, including negative impacts on the market price of its securities;
|
● |
Just Eat Takeaway.com may experience negative reactions from consumers, restaurant partners and employees of the Just Eat Takeaway.com Group;
|
● |
Just Eat Takeaway.com will be required to pay its costs relating to the Transaction, whether or not Completion occurs;
|
● |
Just Eat Takeaway.com may be required to pay to Grubhub a cash termination fee of $144 million as prescribed by the Merger Agreement;
|
● |
the Merger Agreement places certain restrictions on the conduct of the business of the Just Eat Takeaway.com Group prior to Completion, which may have prevented the Just Eat Takeaway.com Group from making certain acquisitions, taking
certain other specified actions or otherwise pursuing business opportunities between the signing of the Merger Agreement and the abandonment of the Transaction;
|
● |
matters relating to Merger preparation (including integration planning) require substantial commitments of time and resources by Just Eat Takeaway.com management, which may result in the distraction of Just Eat Takeaway.com’s management
from ongoing business operations between the signing of the Merger Agreement and the abandonment of the Transaction; and
|
● |
Just Eat Takeaway.com may be subject to litigation related to any failure to complete the Transaction or related to any enforcement proceeding commenced against Just Eat Takeaway.com to perform its obligations under the Merger Agreement.
|
2. |
RISKS RELATING TO THE ENLARGED GROUP AS A RESULT OF THE TRANSACTION
|
1. |
MERGER AGREEMENT
|
● |
were not intended as statements of fact, but rather as a way of allocating the risk between the parties to the Merger Agreement if those statements prove to be inaccurate;
|
● |
have been qualified in some cases by certain confidential disclosures that were made by each party in connection with the negotiation of the Merger Agreement, which disclosures are not reflected in the Merger Agreement; and
|
● |
may apply standards of materiality in a way that is different from what may be viewed as material by Just Eat Takeaway.com Shareholders.
|
● |
each issued and outstanding share of capital stock of Merger Sub I will be converted into and become one validly issued, fully paid and non-assessable share of Grubhub;
|
● |
each share of Grubhub common stock held in treasury or owned by Just Eat Takeaway.com or any of its subsidiaries (including Merger Sub I and Merger Sub II) will be cancelled, retired and cease to exist, and no merger consideration will be
delivered in exchange therefor; and
|
● |
each issued and outstanding share of Grubhub common stock will cease to be outstanding, be cancelled and cease to exist and will automatically be converted into one share of common stock, par value $0.0001 per share, of the initial
surviving company, and each such share of the initial surviving company will immediately thereafter be automatically exchanged for the right to receive (1) 0.6710 (referred to as the “exchange ratio”)
New Just Eat Takeaway.com ADSs (referred to as the “merger consideration”), plus (2) cash in lieu of fractional New Just Eat Takeaway.com ADSs (see “Fractional ADSs”
below), plus (3) any dividends or other distributions to which such holder is entitled pursuant to the Merger Agreement, and otherwise subject to adjustments to prevent dilution in accordance with the Merger Agreement.
|
● |
organization, standing, corporate power, ownership of subsidiaries and organizational documents;
|
● |
capital structure, including the number of shares of capital stock of Grubhub and equity-based awards outstanding;
|
● |
Grubhub’s authority to execute and deliver and, subject to the Grubhub stockholder approval, perform its obligations under, and to complete the transactions contemplated by, the Merger Agreement, and the enforceability of the Merger
Agreement against Grubhub;
|
● |
absence of conflicts with, or violations of, organizational documents (subject to the Grubhub stockholder approval), applicable law and certain contracts as a result of Grubhub entering into the Merger Agreement, performing its obligations
thereunder, completing the mergers and the other transactions contemplated thereby and compliance with the terms of the Merger Agreement;
|
● |
the determination by the Grubhub board of directors that: (i) the Merger Agreement and transactions contemplated therein are fair and in the best interest of Grubhub and Grubhub Stockholders, (ii) it was advisable for Grubhub to enter into
the Merger Agreement and consummate the transactions contemplated thereby, (iii) the Merger Agreement is adopted and the execution, delivery and performance of the Merger Agreement approved, (iv) the Grubhub board of directors recommends that
the Grubhub Stockholders adopt the Merger Agreement and (v) the Merger Agreement be submitted to Grubhub Stockholders for adoption;
|
● |
government consents and approvals required in connection with the transactions contemplated by the Merger Agreement;
|
● |
SEC documents, financial statements, accounting practices, internal controls, disclosure controls, compliance with NYSE listing requirements and absence of undisclosed liabilities;
|
● |
other than in connection with the transactions contemplated by the Merger Agreement and related matters, the conduct of Grubhub and its subsidiaries’ business in the ordinary course in all material respects since 31 December 2019 through
the date of the Merger Agreement and, since 31 December 2019, Grubhub has not taken certain actions that during the period from the signing of the Merger Agreement until Completion would require Just Eat Takeaway.com’s approval under the
Merger Agreement;
|
● |
absence of a material adverse effect since 31 December 2019 through the date of the Merger Agreement;
|
● |
absence of certain litigation or other actions pending or, to the knowledge of Grubhub, threatened against Grubhub or any of its subsidiaries;
|
● |
compliance with applicable laws and permits, including sanctions and export control laws;
|
● |
tax matters;
|
● |
employee benefits and labor matters, including matters related to employee benefit plans, and compliance with the Employee Retirement Income Security Act of 1974, as amended;
|
● |
environmental matters;
|
● |
intellectual property matters;
|
● |
inapplicability of “moratorium,” “control share acquisition” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination” or other similar anti-takeover statutes to the Merger Agreement, the mergers or the other
transactions contemplated thereby;
|
● |
owned and leased real property;
|
● |
material contracts;
|
● |
insurance matters;
|
● |
receipt of an opinion from Evercore Group L.L.C, a financial advisor;
|
● |
broker’s fees and expenses payable in connection with the mergers;
|
● |
the required vote of the Grubhub Stockholders in favor of the adoption of the Merger Agreement (referred to as the “Grubhub stockholder approval”);
|
● |
accuracy of information supplied or to be supplied in this Circular, the Form F-4 and the Prospectus;
|
● |
compliance with anti-corruption laws; and
|
● |
absence of related party transactions, other than employment-related contracts.
|
● |
organization, standing, corporate power, ownership of subsidiaries and organizational documents;
|
● |
capital structure, including the number of shares of capital stock of Just Eat Takeaway.com and equity-based awards outstanding;
|
● |
authority to execute and deliver and perform their respective obligations under, and to complete the transactions contemplated by, the Merger Agreement, and the enforceability of the Merger Agreement against Just Eat Takeaway.com, Merger
Sub I and Merger Sub II;
|
● |
absence of conflicts with, or violations of, organizational documents, applicable law and certain contracts as a result of Just Eat Takeaway.com entering into the Merger Agreement, performing its obligations thereunder, completing the
mergers and the other transactions contemplated thereby and compliance with the terms of the Merger Agreement;
|
● |
determination by the Management Board and Supervisory Board that the Merger Agreement and transactions contemplated therein, including the issuance of New Just Eat Takeaway.com ADSs and the New Just Eat Takeaway.com Shares, are fair to and
in the best interests of Just Eat Takeaway.com and its business enterprise and that it is advisable for Just Eat Takeaway.com to enter into the Merger Agreement, to adopt the Merger Agreement and approve the execution, delivery and
performance by Just Eat Takeaway.com of the Merger Agreement and the transactions contemplated thereby and the recommendation that the Just Eat Takeaway.com Shareholders vote in favor of (1) the resolution to pursue the transaction under
Section 2:107a of the Dutch Civil Code, (2) the resolution to delegate authority to the Management Board to issue the New Just Eat Takeaway.com Shares, (3) the terms of the Merger Agreement (the matters in (1)-(3) are referred to as the “transaction proposals”), (4) the appointment of the Grubhub Management Board nominee to the Management Board and the Grubhub Supervisory Board nominees to the Supervisory Board (“Grubhub Management Board nominee” and “Grubhub Supervisory Board nominee” being defined in the paragraph below entitled “Supervisory Board and
Management Board following the mergers” and such nominations being referred to collectively hereafter as the “board
nominations”) and (5) the delegation of authority to exclude or limit pre-emptive rights in relation to the issuance of the New Just Eat Takeaway.com Shares (the matter in (5) is referred to as the “preemptive
rights authorization”);
|
● |
government consents and approvals required in connection with the transactions contemplated by the Merger Agreement;
|
● |
public reports and other documents in compliance with the Listing Rules, FCA rules and regulations, regulations, orders and decrees promulgated under Book 2 of the Dutch Civil Code and the Commercial Registers Act 2007, regulations, orders
and decrees promulgated under the FMSA, regulations promulgated by the AFM and absence of undisclosed liabilities;
|
● |
other than in connection with the transactions contemplated by the Merger Agreement, the conduct of Just Eat Takeaway.com and its subsidiaries’ business in the ordinary course in all material respects, since 31 December 2019 through the
date of the Merger Agreement, and, since 31 December 2019, Just Eat Takeaway.com has not taken certain actions that during the period from the signing of the Merger Agreement until Completion would require Grubhub’s approval under the Merger
Agreement;
|
● |
absence of a material adverse effect since 31 December 2019 through the date of the Merger Agreement;
|
● |
absence of certain litigation or other actions pending or, to the knowledge of Just Eat Takeaway.com, threatened against Just Eat Takeaway.com or any of its subsidiaries;
|
● |
compliance with applicable laws and permits, including sanctions and export control laws;
|
● |
tax matters;
|
● |
employee benefits and labor matters, including matters related to employee benefit plans, and compliance with the Employee Retirement Income Security Act of 1974, as amended;
|
● |
environmental matters;
|
● |
intellectual property matters;
|
● |
inapplicability of “moratorium,” “control share acquisition” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination” or other similar antitakeover statutes to the Merger Agreement, the mergers or the other
transactions contemplated thereby;
|
● |
material contracts;
|
● |
broker’s fees and expenses payable in connection with the mergers;
|
● |
ownership and operations of Merger Sub I and Merger Sub II;
|
● |
absence of share ownership in Grubhub;
|
● |
the required votes of the Just Eat Takeaway.com Shareholders in favor of the transaction proposals and the board nominations (referred to as the “Just Eat Takeaway.com shareholder approval”);
|
● |
accuracy of information supplied or to be supplied in this Circular, the Form F-4, and the Prospectus;
|
● |
compliance with anti-corruption laws; and
|
● |
absence of related party contracts and transactions, other than employment-related contracts.
|
● |
any effect generally affecting any of the industries or markets in which such party operates;
|
● |
changes in laws or changes in accounting requirements or principles (or changes in interpretation, implementation or enforcement thereof);
|
● |
general economic regulatory or political conditions (or changes therein), including any government shutdown or slowdown, or conditions (or changes therein) in the financial, credit or securities markets (including changes in interest
rates, currency exchange rates, monetary policy or fiscal policy), in any country or region in which such party or its subsidiaries conduct business;
|
● |
any acts of God, natural disasters, terrorism, armed hostilities, sabotage, war, curfews, riots, demonstrations or public disorders or any escalation or worsening of acts of terrorism, armed hostilities, war, riots, demonstrations or
public disorders;
|
● |
any epidemic, pandemic or disease outbreak (including COVID-19), or any COVID-19 measures or any change in such COVID-19 measures or interpretations thereof. “COVID-19 measures” means any
quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, safety or similar law, directive, guidelines or recommendations promulgated by any industry group or any governmental
authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19, including the Coronavirus Aid, Relief and Economic Security Act, as signed
into law by the President of the United States of America on 27 March 2020 and Families First Coronavirus Response Act, as signed into law by the President of the United States of America on 18 March 2020;
|
● |
the announcement, pendency or performance of the Merger Agreement and transactions contemplated thereby, including the impact on any relationships with customers, suppliers, distributors, collaboration partners, employees or regulators;
|
● |
the taking of any action expressly required by the Merger Agreement or taken at the written request of, or with the prior consent, of the other party;
|
● |
changes in the market price or trading volume of such person’s securities, except that this clause in the Merger Agreement will not prevent or otherwise affect a determination that any change, event, circumstance, occurrence, effect,
development or state of facts underlying such change to market prices or trading volumes has resulted in or contributed to a material adverse effect;
|
● |
the failure of such person to meet any internal, analysts’ or other earnings estimates or financial projections or forecasts for any period, or any changes in credit ratings and any changes in any analysts recommendations or ratings,
except that this clause in the Merger Agreement will not prevent or otherwise affect a determination that any change, event, circumstance, occurrence, effect, development or state of facts underlying such failure has resulted in or
contributed to a material adverse effect; and
|
● |
with respect to Grubhub only, any litigation or claim brought or threatened against any party or its directors, officers or employees relating to the transactions contemplated by the Merger Agreement and the Voting and Support Agreement.
|
● |
issue, deliver, sell, grant, pledge, dispose of or encumber any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to acquire or subscribe for any shares of
its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, evidencing the right to acquire or subscribe for or having a
value determined by reference to, any shares of its capital stock, except for (1) the issuance of shares of common stock required to be issued pursuant to the exercise of options or the vesting and settlement of restricted stock units,
referred to as “RSUs”, and (2) transactions among Grubhub and its wholly owned subsidiaries not involving any Grubhub securities;
|
● |
redeem, purchase or otherwise acquire any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except for (1)
acquisitions by Grubhub of shares of Grubhub common stock in connection with withholding to satisfy tax obligations with respect to options or RSUs, (2) acquisitions by Grubhub of options or RSUs in connection with the forfeiture of such
equity awards or (3) acquisitions by Grubhub of shares of Grubhub common stock in connection with the net exercise of options;
|
● |
(1) establish a record date for, declare, authorize, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests, other than dividends paid
by any subsidiary of Grubhub to Grubhub or any wholly owned subsidiary of Grubhub that do not result in the payment of a material amount of tax or directly result in the loss of a material tax asset (excluding an adjustment to the tax basis
in the equity of such subsidiary or similar tax asset), (2) adjust, split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests or (3) enter into any agreement with respect to the voting of its
equity interests;
|
● |
incur any indebtedness except for (1) indebtedness not to exceed $10 million in the aggregate outstanding at any time, (2) indebtedness other than for borrowed money incurred in the ordinary course of business, (3) indebtedness under
Grubhub’s revolving credit facility not to exceed the maximum amount of the commitments available thereunder as of the date of the Merger Agreement, (4) indebtedness incurred to replace, renew, extend, refinance or refund any existing
indebtedness; provided that (a) the aggregate principal amount of such indebtedness does not exceed the aggregate principal amount of such existing indebtedness (plus the amount of any accrued or unpaid interest or fees related thereto), (b)
such indebtedness is on prevailing market terms or terms substantially consistent with, or more beneficial to Grubhub and its subsidiaries than, such existing indebtedness and (c) the execution, delivery and performance of the Merger
Agreement and the transactions contemplated thereby would not conflict with, or result in any violation of or default under, or give rise to a right of termination, cancellation or acceleration of such indebtedness (except to the extent
provided in such existing indebtedness) or (5) indebtedness among Grubhub and any of its wholly owned subsidiaries or among any of such subsidiaries;
|
● |
enter into or make any loans, capital contributions or advances to or investments in any person (other than Grubhub or any wholly owned subsidiary of Grubhub) except in the ordinary course of business;
|
● |
sell, assign, pledge, lease (as lessor), license, mortgage, or otherwise subject to any lien (other than certain permitted liens) or otherwise dispose of any of its properties or assets (including intellectual property) that are material
to Grubhub and its subsidiaries taken as a whole, except (1) sales of products or services and licenses of intellectual property in the ordinary course of business, (2) dispositions of inventory, equipment or other assets that are not
material to the business of Grubhub or any of its subsidiaries or are no longer used or useful in the conduct of the business of Grubhub or any of its subsidiaries or (3) transfers, sales, licenses or other transactions among Grubhub and its
wholly owned subsidiaries that do not result in the payment of a material amount of tax or directly result in the loss of a material tax asset (excluding an adjustment to the tax basis in the equity of such subsidiary or similar tax asset);
|
● |
make or authorize capital expenditures except in the ordinary course of business;
|
● |
make any acquisition of the capital stock or assets or division of any other person for consideration in excess of $10 million in any transaction or $30 million in all such acquisitions or enter into or acquire any interest in any joint
venture or similar agreement;
|
● |
except as required to comply with any contract or benefit plan of Grubhub or its subsidiaries in effect on the date of the Merger Agreement or to be implemented in accordance with provisions of the Merger Agreement, as contemplated by the
terms of the Merger Agreement or, solely in respect of clauses (1) and (2) hereinafter, in the ordinary course of business with respect to individuals whose annualized base compensation is less than $150,000, (1) increase the compensation or
benefits of, or grant any awards under any bonus incentive, performance or other compensation arrangements to, any current or former director, officer, employee or other individual service provider of Grubhub or its subsidiaries, (2)
terminate or hire any director, officer, employee or other individual service provider of Grubhub or its subsidiaries, other than terminations for “cause” (as reasonably determined by Grubhub in accordance with past practices), (3) establish,
adopt, terminate or amend any material benefit plan of Grubhub or its subsidiaries or any collective bargaining agreement or other labor contract of Grubhub or its subsidiaries, (4) take any action to accelerate the vesting or payment of
compensation or benefits under any Grubhub benefit plan or (5) grant any severance, retention, change in control or termination compensation or benefits or increase such compensation or benefits;
|
● |
make or change any material tax election, file any material amended tax return, settle or compromise any audit or proceeding relating to taxes that involves a material amount of taxes, or enter into any “closing agreement” within the
meaning of Section 7121 of the Internal Revenue Code of 1986 (or any similar provision of state, local, or non-U.S. law) with respect to any material tax;
|
● |
make any material change to its accounting methods, principles or practices, except as required by changes in GAAP or applicable laws and regulations or applicable authorities or in connection with the preparation of this Circular or the
Prospectus or any amendments or supplements thereto;
|
● |
amend the Grubhub organizational documents or organizational documents of any Grubhub subsidiary;
|
● |
adopt a plan or agreement of complete or partial liquidation, dissolution, reorganization or reincorporation in another jurisdiction;
|
● |
except for actions taken in the ordinary course of business, enter into, modify, amend, waive, fail to enforce (in each case in any material respect), assign or terminate any material contract;
|
● |
enter into, modify or amend any related party transaction that would be required to be disclosed in Grubhub’s Form 10-K or in a Grubhub proxy statement pertaining to an annual meeting of shareholders;
|
● |
except as permitted by the Merger Agreement with respect to litigation related to the mergers, waive, release, assign, settle or compromise any claim or action, other than waivers, releases, assignments, settlements or compromises that do
not create obligations of Grubhub or any of its subsidiaries other than the payment of monetary damages (1) equal to or lesser than the amounts reserved with respect thereto on Grubhub’s consolidated balance sheet as of 31 March 2020 or (2)
not in excess of $25 million in the aggregate; or
|
● |
agree in writing to take any of the foregoing actions or fail to take any action that would result in the foregoing.
|
● |
issue, deliver, sell, grant, pledge, dispose of or encumber any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to acquire or subscribe for any shares of
its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, evidencing the right to acquire or subscribe for or having a
value determined by reference to, any shares of its capital stock, except for (1) the issuance of Just Eat Takeaway.com Shares required to be issued pursuant to the exercise of Just Eat Takeaway.com options or the vesting and settlement of
other equity-based awards of Just Eat Takeaway.com, in each case outstanding on the date hereof or granted after the date hereof not in violation of the Merger Agreement, (2) the issuance of Just Eat Takeaway.com options and other
equity-based awards of Just Eat Takeaway.com in the ordinary course of business, (3) transactions among Just Eat Takeaway.com and its wholly owned subsidiaries not involving any Just Eat Takeaway.com securities and (4) the issuance of Just
Eat Takeaway.com Shares upon conversion of any of the Convertible Bonds in accordance with the terms thereof as in effect as of the date of the Merger Agreement;
|
● |
redeem, purchase or otherwise acquire any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except for (1)
acquisitions by Just Eat Takeaway.com of Just Eat Takeaway.com Shares in connection with withholding to satisfy tax obligations with respect to options, (2) acquisitions by Just Eat Takeaway.com of equity awards (including options) in
connection with the forfeiture of such equity awards or (3) acquisitions by Just Eat Takeaway.com of Just Eat Takeaway.com Shares in connection with the net exercise of options;
|
● |
(1) establish a record date for, declare, authorize, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests, other than dividends paid
by any subsidiary of Just Eat Takeaway.com to Just Eat Takeaway.com or any wholly owned subsidiary of Just Eat Takeaway.com that do not result in the payment of a material amount of tax or directly result in the loss of a material tax asset
(excluding an adjustment to the tax basis in the equity of such subsidiary or similar tax asset), (2) adjust, split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests or (3) enter into any
agreement with respect to the voting of its equity interests;
|
● |
incur any indebtedness except for (1) indebtedness other than for borrowed money incurred in the ordinary course of business, (2) indebtedness under Just Eat Takeaway.com’s revolving credit facility not to exceed the maximum amount of the
commitments available thereunder as of the date of the Merger Agreement (including the amount of the uncommitted “accordion feature”, (3) indebtedness incurred to replace, renew, extend, refinance or refund any existing indebtedness of Just
Eat Takeaway.com or any of its subsidiaries or of Grubhub or any of its subsidiaries; provided that (a) the aggregate principal amount of such indebtedness does not exceed the aggregate principal amount of such existing indebtedness (plus the
amount of any accrued or unpaid interest or fees related thereto), (b) such indebtedness is on prevailing market terms or terms substantially consistent with, or more beneficial to Just Eat Takeaway.com and its subsidiaries than, such
existing indebtedness and (c) the execution, delivery and performance of the Merger Agreement and the transactions contemplated thereby would not conflict with, or result in any violation of or default under, or give rise to a right of
termination, cancellation or acceleration of such indebtedness (except to the extent provided in such existing indebtedness) (4) indebtedness incurred to fund any amounts payable in connection with, or as a result of, the transactions
contemplated by the Merger Agreement, (5) indebtedness among Just Eat Takeaway.com and any of its wholly owned subsidiaries or among any of such subsidiaries or (6) other indebtedness not to exceed $300 million in the aggregate outstanding at
any time;
|
● |
make any acquisition of the capital stock or assets or division of any other person;
|
● |
make any material change to its accounting methods, principles or practices, except as required by changes in IFRS or applicable laws and regulations or applicable authorities or in connection with the registration of Just Eat Takeaway.com
Shares to be issued pursuant to the Merger Agreement;
|
● |
amend the Just Eat Takeaway.com organizational documents or, except as would not reasonably be expected to have a material adverse effect on Just Eat Takeaway.com or prevent or materially delay or impair the ability of Just Eat
Takeaway.com, Merger Sub I or Merger Sub II to complete the mergers, organizational documents of any Just Eat Takeaway.com subsidiary;
|
● |
adopt a plan or agreement of complete or partial liquidation, dissolution, reorganization or reincorporation in another jurisdiction, other than transactions involving Just Eat Takeaway.com’s subsidiaries other than Merger Sub I or Merger
Sub II if such transactions would not reasonably be expected to have a material adverse effect on Just Eat Takeaway.com or prevent or materially delay or impair the ability of Just Eat Takeaway.com, Merger Sub I or Merger Sub II to complete
the mergers; or
|
● |
agree in writing to take any of the foregoing actions or fail to take any action that would result in the foregoing.
|
● |
initiate, seek, solicit or knowingly encourage (including by way of furnishing any non-public information), knowingly induce or knowingly facilitate or take any other action which would reasonably be expected to lead to the making,
submission or announcement of any takeover proposal, with respect to such party;
|
● |
engage or participate in negotiations or discussions with, or provide any non-public information or non-public data to, any person (other than the parties to the Merger Agreement and their respective officers, directors, employees or
representatives) relating to any takeover proposal or grant any waiver or release under any standstill or other agreement (except that if the Grubhub board of directors or Just Eat Takeaway.com Boards, as applicable, determine in good faith
(after consultation with outside counsel) that the failure to grant any waiver or release would be inconsistent with such party’s directors’ fiduciary duties under applicable law, such party may waive any such standstill provision in order to
permit a third party to make a takeover proposal); or
|
● |
resolve to take any of the actions described in the preceding two bullet points.
|
● |
contact the person who has made such takeover proposal and its representatives in order to clarify the terms of such takeover proposal so that such party’s board or boards, as applicable, may inform itself about such takeover proposal;
|
● |
furnish information concerning its business, properties or assets to the person who made such takeover proposal and its representatives pursuant to a confidentiality agreement that meets certain requirements set forth in the Merger
Agreement (provided that all such information has previously been furnished to the other party to the Merger Agreement or is furnished to the other party prior to or substantially concurrently with the time it is furnished to such person);
and
|
● |
negotiate and participate in discussions and negotiations with the person who has made such takeover proposal and its representatives concerning such takeover proposal.
|
● |
promptly (and in any case within one business day) provide the other party notice of (1) the receipt of any takeover proposal, including a copy of such takeover proposal, and (2) of any inquiries, proposals or offers received by, any
requests for non-public information from, or any discussions or negotiations sought to be initiated or continued concerning a takeover proposal or that would reasonably be expected to lead to a takeover proposal, and disclose the identity of
the other party (or parties) and the material terms of such inquiry, offer, proposal or request and, in the case of written materials, provide copies of any such substantive materials;
|
● |
promptly (and in any case within one business day) make available to the other party copies of all substantive written materials provided by such party to the third party but not previously made available to the other party; and
|
● |
keep the other party informed on a reasonably prompt basis (and, in any case, within one business day of any significant development) of the status and material details (including amendments and proposed amendments) of any such takeover
proposal or other inquiry, offer, proposal or request.
|
● |
merger, consolidation, share exchange, business combination, recapitalization or similar transaction involving such party or any of its subsidiaries, pursuant to which any person (or the stockholders of such person) or group would own or
control, directly or indirectly, 20% or more of the voting power of such party,
|
● |
sale, lease, license, dissolution or other disposition, directly or indirectly, of assets of such party (including the equity interests of any of its subsidiaries) or any subsidiary of such party representing 20% or more of the
consolidated assets, revenues or EBITDA of such party and its subsidiaries, taken as a whole, as of or for the fiscal year ending, as appropriate, 31 December 2019, or to which 20% or more of such party’s revenues, earnings or assets on a
consolidated basis are attributable, taken as a whole, as of or for the fiscal year ending, as appropriate, 31 December 2019;
|
● |
issuance or sale or other disposition of such party’s securities representing 20% or more of the voting power of such party;
|
● |
tender offer, exchange offer or any other transaction or series of transactions in which any person (or the stockholders of such person) or group will acquire, directly or indirectly, beneficial ownership or the right to acquire beneficial
ownership of party’s securities representing 20% or more of the voting power of such party; or
|
● |
any combination of the foregoing.
|
● |
withhold or withdraw (or qualify or modify in any manner adverse to Just Eat Takeaway.com), or propose publicly to withhold or withdraw (or qualify or modify in any manner adverse to Just Eat Takeaway.com), the Grubhub recommendation;
|
● |
adopt, approve, recommend or declare advisable, or propose publicly to adopt, approve, recommend or declare advisable, a Grubhub takeover proposal;
|
● |
fail to include the Grubhub recommendation in the Form F-4;
|
● |
if any Grubhub takeover proposal structured as a tender offer or exchange offer is commenced, fail to recommend against acceptance of such tender offer or exchange offer by Grubhub stockholders within ten business days of the commencement
thereof (or any material modification thereto) pursuant to Rule 14d-2 promulgated under the Exchange Act;
|
● |
fail to publicly reaffirm the Grubhub recommendation within ten business days after receiving a written request to do so from Just Eat Takeaway.com if any Grubhub takeover proposal or any material modification thereto shall have been
publicly made, sent or given to Grubhub Stockholders (or, if sooner, prior to the special meeting); or
|
● |
cause or permit Grubhub to enter into any agreement, letter of intent, memorandum of understanding, agreement in principle or other contract with respect to any Grubhub takeover proposal.
|
● |
the receipt, existence or terms of any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to, a takeover proposal or any matter relating thereto;
|
● |
any event or circumstance arising in connection with obtaining regulatory approvals;
|
● |
any change in the market price, or change in trading volume, of the capital stock of any party (however the events or circumstances giving rise or contributing to such change may be deemed to constitute an intervening event or be taken
into accounting in determining whether an intervening event has occurred); or
|
● |
the fact that any party or any of their respective subsidiaries exceeds or fails to meet internal, analysts’ or other earnings estimates or financial projections or forecasts for any period, or any changes in credit ratings and any changes
in any analysts’ recommendations or ratings with respect to Grubhub, Just Eat Takeaway.com or any of their respective subsidiaries (however, the events or circumstances giving rise or contributing thereto may be deemed to constitute an
intervening event or be taken into accounting in determining whether an intervening event has occurred).
|
● |
withhold or withdraw (or qualify or modify in any manner adverse to Grubhub), or propose publicly to withhold or withdraw (or qualify or modify in any manner adverse to Grubhub), the Just Eat Takeaway.com recommendation;
|
● |
adopt, approve, recommend or declare advisable, or propose publicly to adopt, approve, recommend or declare advisable, a Just Eat Takeaway.com takeover proposal;
|
● |
fail to include the Just Eat Takeaway.com recommendation in this Circular and any supplementary shareholder circular of the Company;
|
● |
if any Just Eat Takeaway.com takeover proposal structured as a public offer (openbaar bod) is commenced, or if the intention to make such an offer is announced, fail to recommend against acceptance
of such offer by Just Eat Takeaway.com Shareholders within ten business days of the commencement or announcement, as applicable, thereof (or any material modification thereto);
|
● |
fail to publicly reaffirm the Just Eat Takeaway.com board recommendation within ten business days after receiving a written request to do so from Grubhub if any Just Eat Takeaway.com takeover proposal or any material modification thereto
shall have been publicly made, sent or given to Just Eat Takeaway.com Shareholders (or, if sooner, prior to the extraordinary general meeting); or
|
● |
cause or permit Just Eat Takeaway.com to enter into any agreement, letter of intent, memorandum of understanding, agreement in principle or other contract with respect to any Just Eat Takeaway.com takeover proposal.
|
● |
take, or cause to be taken, all actions, and do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to cause the conditions to complete the mergers to be satisfied as
promptly as reasonably practicable and to consummate and make effective as promptly as reasonably practicable, the mergers and other transactions contemplated by the Merger Agreement, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents;
|
● |
obtain all approvals, consents, registrations, waivers, permits, authorizations, orders and other confirmations from any governmental authority or third party necessary, proper or advisable to consummate the mergers and the other
transactions contemplated by the Merger Agreement;
|
● |
execute and deliver any additional instruments necessary, proper or advisable to complete the transactions contemplated by the Merger Agreement; and
|
● |
defend or contest in good faith any action brought by a third party that could otherwise prevent or impede, interfere with, hinder or delay in any material respect, the completion of the mergers and other transactions contemplated by the
Merger Agreement.
|
● |
executing settlements, undertakings, consent decrees, stipulations or other agreements with any governmental authority or with any other person;
|
● |
selling, divesting or otherwise conveying or holding separate particular assets or categories of assets or businesses of Just Eat Takeaway.com and its subsidiaries;
|
● |
agreeing to sell, divest or otherwise convey or hold separate any particular assets or categories of assets or businesses of Grubhub and its subsidiaries contemporaneously with or subsequent to Completion;
|
● |
permitting Grubhub to sell, divest or otherwise convey or hold separate any of the particular assets or categories of assets or businesses of Grubhub or any of its subsidiaries;
|
● |
terminating existing relationships, contractual rights or obligations of Grubhub or Just Eat Takeaway.com or their respective subsidiaries;
|
● |
terminating any joint venture or other arrangement of Grubhub or Just Eat Takeaway.com or their respective subsidiaries;
|
● |
creating any relationship, contractual right or obligation of Grubhub or Just Eat Takeaway.com or their respective subsidiaries;
|
● |
agreeing to change or modify any course of conduct, or otherwise limit freedom of action, regarding the operations or governance of Grubhub or Just Eat Takeaway.com or their respective subsidiaries;
|
● |
effectuating any other change or restructuring of Grubhub or Just Eat Takeaway.com or their respective subsidiaries (and, in each case, entering into agreements or stipulating to the entry of any judgment by, or filing appropriate
applications with, the Federal Trade Commission, the U.S. Department of Justice, CFIUS or any other governmental authority in connection with any of the foregoing and, in the case of actions by or with respect to Grubhub, by consenting to
such action by Grubhub);
|
● |
taking any actions or making any behavioral commitments that may limit or modify Grubhub’s, Just Eat Takeaway.com’s or their respective subsidiaries’ rights of ownership in, or ability to conduct the business of, or with respect to one or
more of their respective operations, divisions, businesses, product lines, specific products, categories of products, customers, specific assets or categories of assets; and
|
● |
defending through litigation any claim asserted in court or administrative or other tribunal by any person (including any governmental authority) in order to avoid entry of, or to have vacated or terminated any restraint that would prevent
Completion prior to the end date.
|
● |
cooperate in all respects with the other party, including furnishing such necessary information and assistance as the other may reasonably request, in connection with any filing or submission with a governmental authority in connection
with the transactions contemplated by the Merger Agreement and in connection with any investigation or other inquiry by or before a governmental authority relating to the transactions contemplated by the Merger Agreement, including any
proceeding initiated by a private person;
|
● |
give prompt notice to the other party of and, if in writing, furnish the others with copies of (or, in the case of oral communications, advise the others of the contents of) any communication received from a governmental authority or any
private person whose consent is or may be required in connection with the transactions contemplated by the Merger Agreement (or who alleges as much) in connection with the transactions contemplated by the Merger Agreement;
|
● |
prior to submitting certain materials to a governmental authority or private person whose consent is or may be required in connection with the transactions contemplated by the Merger Agreement (or who alleges as much) in connection with
the transactions contemplated by the Merger Agreement, allow the other party to review and discuss such materials in advance of submission, and consider in good faith the comments of the other party in connection with, any such materials;
|
● |
keep one another reasonably informed as to the status of and the processes and proceedings relating to obtaining such consents and approvals; and
|
● |
not independently participate in any substantive meeting, hearing, proceeding or discussions with or before a governmental authority in connection with the transactions contemplated by the Merger Agreement, without giving the other party
or their counsel reasonable prior notice, and if permitted by such governmental authority, the opportunity to attend or participate.
|
● |
annual base salary or base wages that are no less favorable than those provided to such employee immediately before the first effective time;
|
● |
cash and equity incentive compensation opportunities that are no less favorable than what was provided to such employee immediately before the first effective time;
|
● |
employee benefits that are comparable in the aggregate to those provided to such employee immediately before the first effective time (excluding defined benefit pension, post-employment health and welfare benefits, equity-based
compensation and change of control, retention or other one-off awards); and
|
● |
Just Eat Takeaway.com will provide each continuing employee whose employment terminates during the continuation period with severance pay and benefits at levels equal to the greater of those provided under (x) Grubhub severance policies,
including those described in “Security Ownership of Certain Beneficial Owners and Management” and (y) Just Eat Takeaway.com’s severance policies that are applicable to similarly situated employees of
Just Eat Takeaway.com.
|
Management Board /
Supervisory Board Nominee
|
Number of Unvested Stock Options
|
Number of Vested Stock Options
|
Number of Restricted Stock Units
|
Matthew Maloney
|
313,143
|
1,314,870
|
112,917
|
David Fisher
|
3,726
|
43,271
|
1,618
|
Lloyd Frink
|
3,726
|
51,672
|
1,618
|
● |
cooperation between Just Eat Takeaway.com and Grubhub in the preparation of the Form F-4, the registration statement on Form 8-A for the New Just Eat Takeaway.com ADSs, the registration statement on Form F-6 for the New Just Eat
Takeaway.com ADSs, the Prospectus and this Circular;
|
● |
cooperation among the parties in connection with public announcements;
|
● |
confidentiality and access by each party to certain information about the other party during the period prior to Completion;
|
● |
the establishment by Just Eat Takeaway.com of a sponsored ADR program for the Just Eat Takeaway.com issuance of New Just Eat Takeaway.com ADSs;
|
● |
Just Eat Takeaway.com to cause, (1) a sufficient number of New Just Eat Takeaway.com ADSs issued as the merger consideration and to be approved for listing on the NYSE or the NASDAQ, subject to official notice of issuance and (2) the New
Just Eat Takeaway.com Shares to be approved for (a) admission to the FCA’s Official List and to trading on the London Stock Exchange’s Main Market and (b) listing and trading on Euronext Amsterdam, in each case to the extent any Just Eat
Takeaway.com Shares are then listed on such exchange;
|
● |
cooperation between Just Eat Takeaway.com and Grubhub in connection with any litigation or claim brought or threatened relating to the transactions contemplated by the Merger Agreement; and
|
● |
cooperation between Just Eat Takeaway.com and Grubhub to delist the Grubhub common stock from the NYSE and terminate its registration under the Exchange Act following Completion.
|
● |
receipt of the Grubhub stockholder approval;
|
● |
receipt of the approval by the General Meeting of the transaction proposals;
|
● |
binding nominations for the appointment of the Grubhub Management Board nominee and the Grubhub Supervisory Board nominees not having been overruled by more than half of the votes validly cast, such number of votes representing more than
one-third of Just Eat Takeaway.com’s issued share capital, at a General Meeting;
|
● |
the expiration or termination of the applicable waiting period under the HSR Act (the “HSR Condition”), satisfaction of the condition relating to the UK Competition and Markets Authority (“CMA”) (the “CMA Condition”) and receipt of written notification from CFIUS indicating the Transaction is not subject to further review or expiration of any applicable
waiting period;
|
● |
the absence of any legal restraints that prevent, make illegal or prohibit Completion;
|
● |
the approval for listing of the New Just Eat Takeaway.com ADSs issuable as the merger consideration on the NYSE or the NASDAQ (subject to official notice of issuance);
|
● |
the approval for admission of the New Just Eat Takeaway.com Shares to (1) listing on the FCA’s Official List and to trading on the London Stock Exchange’s Main Market and (2) listing and trading on Euronext Amsterdam, in each case to the
extent any Just Eat Takeaway.com Shares are then listed on such exchange;
|
● |
effectiveness (1) declared by the SEC of the registration statement filed on Form F-4, (2) declared by the SEC of the registration statement on Form F-6 and (3) of the registration statement on Form 8-A (and the absence of any stop order
suspending the effectiveness of such registration statements or any proceedings seeking such a stop order); and
|
● |
the approval of the Prospectus by the AFM and the FCA, in each case if then applicable, and if then applicable, the AFM’s approval of such Prospectus having been notified to the FCA in accordance with applicable rules and regulations.
|
● |
the representations and warranties of Grubhub relating to organization, standing, corporate power, authority, non-contravention, opinion of financial advisor, brokers, and Grubhub stockholder approval being true and correct in all material
respects as of the first effective time (except to the extent expressly made as of an earlier date, in which case, as of such earlier date);
|
● |
the representation and warranty of Grubhub relating to capitalization being true and correct in all respects, except for any de minimis inaccuracies taking into account the size of Grubhub, as of the first effective time (except to the
extent expressly made as of an earlier date, in which case, as of such earlier date);
|
● |
each other representation and warranty of Grubhub being true and correct (disregarding any “materiality” or “material adverse effect” qualifiers) as of the first effective time (except to the extent expressly made as of an earlier date, in
which case, as of such earlier date), except where the failure of such representations and warranties to be so true and correct, individually and in the aggregate, has not had and would not reasonably be expected to have a material adverse
effect;
|
● |
Grubhub having performed in all material respects all obligations required to be performed by it under the Merger Agreement that are required to be performed on or prior to the completion date;
|
● |
the absence of a material adverse effect on Grubhub since the date of the Merger Agreement; and
|
● |
receipt of an officer’s certificate executed by the chief executive officer, chief financial officer or general counsel of Grubhub certifying that the five preceding conditions have been satisfied.
|
● |
the representations and warranties of Just Eat Takeaway.com, Merger Sub I and Merger Sub II relating to organization, standing, corporate power, authority, noncontravention, brokers, and Just Eat Takeaway.com shareholder approval being
true and correct in all material respects as of the first effective time (except to the extent expressly made as of an earlier date, in which case, as of such earlier date);
|
● |
the representation and warranty of Just Eat Takeaway.com, Merger Sub I and Merger Sub II relating to capitalization being true and correct in all respects, except for any de minimis inaccuracies
taking into account the size of Just Eat Takeaway.com, as of the first effective time (except to the extent expressly made as of an earlier date, in which case, as of such earlier date);
|
● |
each other representation and warranty of Just Eat Takeaway.com, Merger Sub I and Merger Sub II being true and correct (disregarding any “materiality” or “material adverse effect” qualifiers) as of the first effective time (except to the
extent expressly made as of an earlier date, in which case, as of such earlier date), except where the failure of such representations and warranties to be so true and correct, individually and in the aggregate, has not had and would not
reasonably be expected to have a material adverse effect;
|
● |
Just Eat Takeaway.com, Merger Sub I and Merger Sub II having performed in all material respects all obligations required to be performed by it under the Merger Agreement that are required to be performed on or prior to the completion date;
|
● |
the absence of a material adverse effect on Just Eat Takeaway.com since the date of the Merger Agreement; and
|
● |
receipt of an officer’s certificate executed by the chief executive officer or chief financial officer of Just Eat Takeaway.com certifying that the five preceding conditions have been satisfied.
|
● |
by mutual written consent of Just Eat Takeaway.com and Grubhub; or
|
● |
by either Just Eat Takeaway.com or Grubhub in the event that:
|
● |
the first effective time has not occurred on or before 10 June 2021 (or, if the first effective time has not occurred by such date and on such date (1) the conditions to consummate the mergers related (a) to regulatory approvals or (b)
legal restraints (only if such restraint relates to or is based on any antitrust law or the Defense Production Act), have not been satisfied or waived and (2) each of the other Conditions has been satisfied, waived or remains capable of
satisfaction as of such date, then such date will automatically be extended to 10 September 2021) (each of 10 June 2021 and 10 September 2021, as applicable, are referred to as the “end date”), however,
no party may terminate the Merger Agreement if the first effective time has not occurred by the end date if the mergers have not been completed due, in whole or part, to a breach by such party of its representations and warranties or failure
to perform its obligations under the Merger Agreement;
|
● |
a legal restraint that enjoins, restrains, prevents or prohibits Completion becomes final and un-appealable, unless the legal restraint is due, whole or in part, to such party’s failures to perform its obligations under the Merger
Agreement, including with its obligations to use its reasonable best efforts to complete the mergers and the other transactions contemplated by the Merger Agreement as promptly as practicable (as described above in “Efforts to complete the mergers”);
|
● |
the Grubhub Stockholders vote on and fail to adopt the Merger Agreement at the special meeting;
|
● |
the Just Eat Takeaway.com Shareholders fail to approve the transaction proposals or the board nominations;
|
● |
the other party breaches or fails to perform any of its covenants or agreements in the Merger Agreement, or if the other party’s representations or warranties fail to be true and correct, in either case, such that the applicable conditions
to the terminating party’s obligations to complete the mergers would not then be satisfied and such breach is not reasonably capable of being cured by the end date or, if reasonably capable of being cured, has not been cured within 30 days
after giving written notice to the other party of such breach, except that no party may terminate the Merger Agreement for this reason if such party is then in material breach of any covenant or agreement in the Merger Agreement or if such
party’s representations or warranties are not true and correct such that the applicable conditions to the other party’s obligations to complete the mergers would not then be satisfied;
|
● |
prior to obtaining the approval of the other party’s shareholders required to complete the mergers, the board or boards, as applicable, of the other party effects an adverse recommendation change (as described above in “Recommendation of the Grubhub board of directors” and “Recommendation of the Just Eat Takeaway.com Boards”); or
|
● |
prior to obtaining approval of the party’s stockholders or shareholders required to complete the Transaction, in order to enter into an alternative acquisition agreement (as described above in “Recommendation
of the Grubhub board of directors” and “Recommendation of the Just Eat Takeaway.com Boards”).
|
● |
Grubhub terminates the Merger Agreement in order to enter into a definitive agreement providing for a superior proposal;
|
● |
the Grubhub board of directors, or any committee thereof, effects a Grubhub adverse recommendation change prior to obtaining the Grubhub stockholder approval and Just Eat Takeaway.com terminates the Merger Agreement as a result of such
change in recommendation; or
|
● |
(1) the Merger Agreement is terminated because the mergers have not occurred by the end date, the Grubhub stockholder approval is not obtained at the Grubhub special meeting or Grubhub breached its obligations under the Merger Agreement,
(2) prior to such stockholder vote (in the case of a termination due to the failure to obtain the Grubhub stockholder approval) or termination (in all other cases) and after the date of the Merger Agreement, a Grubhub takeover proposal that
contemplates acquiring a majority of the capital stock or assets of Grubhub was made known to Grubhub or the Grubhub board of directors or was publicly disclosed and has not been abandoned or withdrawn (which abandonment or withdrawal shall
be public if such Grubhub takeover proposal has been publicly disclosed) prior to the special meeting or termination of the Merger Agreement and (3) within 12 months after such termination, Grubhub completes or enters into a definitive
agreement with respect to and subsequently completes, any Grubhub takeover proposal of such type.
|
● |
Just Eat Takeaway.com terminates the Merger Agreement in order to enter into a definitive agreement providing for a superior proposal;
|
● |
the Supervisory Board or Management Board, or any committee thereof, effects and adverse recommendation change prior to obtaining Just Eat Takeaway.com shareholder approval and Grubhub terminates the Merger Agreement as a result of such
change in recommendation; or
|
● |
(1) the Merger Agreement is terminated because the mergers have not occurred by the end date, the Just Eat Takeaway.com shareholder approvals are not obtained at the Extraordinary General Meeting or Just Eat Takeaway.com breached its
obligations under the Merger Agreement, (2) prior to such shareholder vote (in the case of a termination due to the failure to obtain Just Eat Takeaway.com shareholder approval) or termination (in all other cases) and after the date of the
Merger Agreement, a Just Eat Takeaway.com takeover proposal that contemplates acquiring a majority of the capital stock or assets of Just Eat Takeaway.com was made known to Just Eat Takeaway.com or the Just Eat Takeaway.com Boards or was
publicly disclosed and has not been abandoned or withdrawn (which abandonment or withdrawal shall be public if such Just Eat Takeaway.com takeover proposal has been publicly disclosed) prior to the Extraordinary General Meeting or termination
of the Merger Agreement and (3) within 12 months after such termination, Just Eat Takeaway.com completes or enters into a definitive agreement with respect to and subsequently completes, any Just Eat Takeaway.com takeover proposal of such
type.
|
2. |
VOTING AND SUPPORT AGREEMENT
|
● |
in favor of (1) the transaction proposals, (2) the board nominations and (3) approval of the delegation of authority to exclude or limit pre-emptive rights in relation to the issuance of the New Just Eat Takeaway.com Shares;
|
● |
in favor of, at the request of Grubhub, any other matter submitted by Just Eat Takeaway.com related to the transactions contemplated by the Merger Agreement (with the Just Eat Takeaway.com Boards recommending that Just Eat Takeaway.com
Shareholders vote to approve such matter);
|
● |
against any Just Eat Takeaway.com takeover proposal or any agreement providing for any Just Eat Takeaway.com takeover proposal or any other matter submitted for shareholder approval at any General Meeting related to a Just Eat Takeaway.com
takeover proposal;
|
● |
against any proposal, action or agreement that would reasonably be expected to (1) prevent or nullify any provision of the Voting and Support Agreement, (2) result in a material breach of any covenant, representation, warranty or any other
obligation or agreement contained in the Merger Agreement or the Voting and Support Agreement, (3) result in any Condition not being satisfied or (4) prevent or materially delay, frustrate or impede the approval, implementation or
consummation of any of the transactions contemplated by the Merger Agreement, or any of the documentation or transactions included in, contemplated by, or in connection with, the Merger Agreement or the Voting and Support Agreement.
|
(A) |
Section A (which is set out in the Appendix to this Circular) contains financial information, presented in US GAAP, which has been extracted, without material adjustment, from Grubhub’s Annual Reports on Form 10-K for FY 2017, FY 2018 and
FY 2019, filed with the SEC on 28 February 2018, 28 February 2019 and 28 February 2020 respectively, on which Grubhub’s auditors have issued unqualified opinions and from Grubhub’s unaudited Quarterly Report on Form 10-Q for the quarter ended
30 June 2020, filed with the SEC on 10 August 2020.
|
(B) |
Section B contains unaudited reconciliations of metrics reported by Grubhub to the metrics that would have been reported had Just Eat Takeaway.com’s IFRS accounting policies been applied for each of FY 2017, FY 2018 and FY 2019 and for the
six months ended 30 June 2020.
|
(C) |
Section C contains a report by Deloitte on the unaudited reconciliations for each of FY 2017, FY 2018 and FY 2019 in Section B.
|
● |
Business combinations - Elected not to apply IFRS 3, ‘‘Business Combinations,’’ retrospectively to business combinations that occurred prior to
the Transition Date. Consequently, business combinations that were recognized before the Transition Date have not been restated. Any goodwill arising on such business combinations before the Transition Date was not adjusted from the
carrying value previously determined under US GAAP as a result of applying this exemption.
|
● |
Share-based compensation - Elected not to apply IFRS 2, Share-based Payments, retrospectively to equity settled share-based payments granted and
vested before the Transition Date. Consequently, share-based payments that were granted and vested before the Transition Date have not been restated.
|
● |
Deemed cost - Property and equipment were carried at cost in accordance with US GAAP. IFRS 1 allows first time adopters to use a previous
valuation of an item of property and equipment at or before the transition date to IFRS as the deemed cost for IFRS, provided that the property and equipment has been depreciated in accordance with IAS 16 from that previous measurement date
forward. Grubhub has elected to apply the deemed cost exemption.
|
1. |
Unaudited reconciliation of Grubhub Inc.’s consolidated net income (loss) for the six months ended 30 June 2020 and the years ended 31 December 2019, 2018 and 2017
|
Year ended 31 December
|
||||||||||||||||||||
Note
|
Six months ended
30 June 2020
|
2019
|
2018
|
2017
|
||||||||||||||||
(in US$ 000’s)
|
||||||||||||||||||||
Consolidated net income (loss) as reported under U.S. GAAP
|
a |
(78,838
|
)
|
(18,566
|
)
|
78,481
|
98,983
|
|||||||||||||
Accounting policy adjustments:
|
||||||||||||||||||||
Leases
|
b |
(275
|
)
|
(1,885
|
)
|
-
|
-
|
|||||||||||||
Share-based compensation
|
c |
(14,045
|
)
|
(21,512
|
)
|
(10,601
|
)
|
(8,585
|
)
|
|||||||||||
Advertising costs
|
d |
680
|
938
|
(1,618
|
)
|
-
|
||||||||||||||
Business combinations
|
e |
-
|
-
|
-
|
-
|
|||||||||||||||
Expensing of RFT devices
|
f |
(11,410
|
)
|
(3,671
|
)
|
(2,037
|
)
|
(2,254
|
)
|
|||||||||||
Deferred tax impact of accounting adjustments
|
g | |
(15,556
|
)
|
(19,493
|
) |
1,569
|
13,867
|
||||||||||||
Consolidated net income (loss) under the Company’s IFRS accounting policies
|
(119,444
|
)
|
(64,189
|
)
|
65,794
|
102,011
|
2. |
Unaudited reconciliation of Grubhub Inc.’s consolidated total equity as at 30 June 2020 and as at 31 December 2019, 2018 and 2017
|
As at 30 June |
As at 31 December
|
|||||||||||||||||||
Note
|
2020
|
2019
|
2018
|
2017
|
||||||||||||||||
(in US$ 000’s)
|
||||||||||||||||||||
Consolidated total equity of Grubhub as reported under U.S. GAAP
|
a
|
1,454,550
|
1,493,570
|
1,442,339
|
1,117,816
|
|||||||||||||||
Accounting policy adjustments:
|
||||||||||||||||||||
Leases
|
b
|
(8,802
|
)
|
(8,552
|
)
|
-
|
-
|
|||||||||||||
Share-based compensation
|
c
|
65
|
494
|
2,389
|
743
|
|||||||||||||||
Advertising costs
|
d
|
-
|
(680
|
)
|
(1,618
|
)
|
-
|
|||||||||||||
Business combinations
|
e
|
1,339
|
1,339
|
1,339
|
1,645
|
|||||||||||||||
Expensing of RFT devices
|
f
|
(23,453
|
)
|
(12,044
|
)
|
(8,372
|
) |
(6,335
|
)
|
|||||||||||
Deferred tax impact of accounting adjustments
|
g
|
11,606
|
27,163
|
46,383
|
75,211
|
|||||||||||||||
Consolidated total equity of Grubhub under the Company’s IFRS accounting policies
|
1,435,305
|
1,501,290
|
1,482,460
|
1,189,080
|
a) |
The consolidated total equity and consolidated net income (loss) of Grubhub Inc. as at and for the years ended 31 December 2019, 2018 and 2017 have been extracted without material adjustment from Grubhub’s consolidated financial statements
set out in Section A of Part VI (Historical Information relating to Grubhub) of this Circular. The consolidated total equity and consolidated net loss of
Grubhub as at and for the six months ended 30 June 2020 have been extracted without material adjustment from Grubhub’s unaudited interim condensed consolidated financial statements also set out in Section A of Part VI (Historical Information relating to Grubhub) of this Circular.
|
b) |
Under U.S. GAAP, leases are classified as either finance or operating at lease commencement if specified criteria have been met, whereas after the adoption of IFRS 16 Leases, IFRS does not distinguish between operating and finance leases.
Rather, IFRS applies a single recognition and measurement model to all leases, which is similar to the treatment of finance leases under US GAAP after the adoption of ASC 842 Leases with effect from 1 January 2019. All of Grubhub’s leases
have been classified as operating under its U.S. GAAP accounting policy, where the lease liability is measured as the present value of the remaining lease payments and the right-of-use asset is re-measured as the amount of the lease liability
adjusted for any lease incentives, prepaid/ accrued rents, initial direct costs, or impairment. This treatment results in the recognition of rent expense on a straight-line basis over the lease term. The adjustment of $0.3 million and $1.9
million for the six months ended 30 June 2020 and the year ended 31 December 2019, respectively, to net loss represents the reversal of rent expense of $9.6 million and $16.7 million for the six months ended 30 June 2020 and the year ended 31
December 2019, respectively, recognized under US GAAP and the recognition of $6.6 million and $13.0 million of depreciation on the right of use assets and $3.2 million and $5.5 million of interest expense on the lease liabilities for the six
months ended 30 June 2020 and the year ended 31 December 2019, respectively, under IFRS. These adjustments also resulted in reductions to the right-of-use asset of $0.3 million and $1.9 million for the six months ended 30 June 2020 and the
year ended 31 December 2019 (these amounts were offset by $0.1 million of foreign exchange differences), respectively, related to re-measurements. No differences were identified prior to the adoption of IFRS 16 and ASC 842.
|
c) |
Under its U.S. GAAP accounting policy, Grubhub has valued its graded vesting awards with service-only conditions as a single award and has recorded the share-based compensation expense for these awards using a straight-line method over the
vesting period for the entire award. IFRS requires that each tranche of a graded vesting award with service-only conditions be valued as a separate award and that the share-based compensation expense be recorded using a straight-line basis
over the respective vesting period for each separately vesting portion of the award. Adjustments have been made to reflect the impact on the grant date fair value and the timing of expense recognition for grants with unvested options as at 1
January 2017.
|
d) |
Under its U.S. GAAP accounting policy, Grubhub elected to capitalize certain advertising costs. The costs were expensed when the related advertising took place. These costs are required to be expensed as incurred under IFRS. Adjustments
have been made to reverse capitalized amounts at each balance sheet date and recognize the costs as other operating expense in the period incurred.
|
e) |
Under US GAAP, Grubhub recorded a measurement period adjustment in 2019 to reverse a $11.5 million valuation allowance for a deferred tax asset recorded as part of preliminary purchase accounting for the 2018 acquisitions of Tapingo and
LevelUp. IFRS requires that measurement period adjustments be recognized on a retrospective basis, revising comparative information for prior periods and the subsequent effects on the prior-period income statement. This resulted in an
increase to deferred tax assets and a corresponding reduction to goodwill during the year ended 31 December 2018.
|
f) |
Under its U.S. GAAP accounting policy, Grubhub has elected to capitalize the cost of restaurant facing technology devices, such as tablets that are distributed to restaurants for purposes of order fulfilment. The Company has elected to
expense the costs for these devices as incurred under its IFRS accounting policies. Adjustments have been made to reverse capitalized amounts and related depreciation for these devices at each balance sheet date and recognize the costs as
cost of sales in the period incurred. These adjustments resulted in reductions to property and equipment of $11.4 million, $3.7 million, $2.0 million, and $2.2 million for the six months ended 30 June 2020 and the years ended 31 December
2019, 31 December 2018, and 31 December 2017, respectively. There was also an opening balance sheet reduction of $4.1 million recognized as of 1 January 2017. The increase to cost of sales was $19.2 million, $14.8 million, $10.6 million,
and $7.0 million, and the reduction to depreciation was $7.8 million, $11.1 million, $8.6 million, and $4.8 million for the six months ended 30 June 2020 and the years ended 31 December 2019, 31 December 2018, and 31 December 2017,
respectively.
|
g) |
Item (g) reflects the tax impact of the accounting adjustments set out above, including the impact of the share based payment adjustment, which is explained in note (c) above. The income tax impacts of the adjustments are calculated using
an effective tax rate of 29.06%, 29.06%, 29.77%, and 29.93%, for the periods ended 30 June 2020, 31 December 2019, 31 December 2018 and 31 December 2017, respectively.
|
(A) |
the Reconciliation has been properly compiled on the basis stated; and
|
(B) |
the adjustments are appropriate for the purpose of presenting the Financial Information (as adjusted) on a basis consistent in all material respects with the Company’s accounting policies,
|
(A) |
the Reconciliation has been properly compiled on the basis stated; and
|
(B) |
the adjustments are appropriate for the purpose of presenting the Financial Information (as adjusted) on a basis consistent in all material respects with the Company’s accounting policies.
|
Adjustments | ||||||||||||||||
Just Eat
Takeaway.com Group
|
Grubhub Group
|
Transaction
adjustments
|
Unaudited
pro forma
Enlarged Group
|
|||||||||||||
As at 30 June 2020
|
As at 30 June 2020
|
|||||||||||||||
€000
|
Note 1
|
Note 2
|
Note 3
|
|||||||||||||
Assets
|
||||||||||||||||
Goodwill
|
4,600,000
|
895,960
|
5,190,267
|
10,686,227
|
||||||||||||
Other intangible assets
|
3,294,000
|
508,211
|
-
|
3,802,211
|
||||||||||||
Property and equipment
|
107,000
|
160,845
|
-
|
267,845
|
||||||||||||
Other non-current assets
|
12,000
|
32,707
|
-
|
44,707
|
||||||||||||
Joint ventures
|
1,635,000
|
-
|
1,635,000
|
|||||||||||||
Deferred tax assets
|
1,000
|
4,070
|
-
|
5,070
|
||||||||||||
Total non-current assets
|
9,649,000
|
1,601,793
|
5,190,267
|
16,441,060
|
||||||||||||
Trade and other receivables
|
106,000
|
67,082
|
-
|
173,082
|
||||||||||||
Other current assets
|
90,000
|
77,010
|
-
|
167,010
|
||||||||||||
Cash and cash equivalents
|
525,000
|
429,752
|
(122,045
|
)
|
832,707
|
|||||||||||
Total current assets
|
721,000
|
573,844
|
(122,045
|
)
|
1,172,799
|
|||||||||||
Total assets
|
10,370,000
|
2,175,637
|
5,068,222
|
17,613,859
|
||||||||||||
Liabilities
|
||||||||||||||||
Borrowings
|
476,000
|
437,478
|
-
|
913,478
|
||||||||||||
Deferred tax liabilities
|
584,000
|
4,070
|
-
|
588,070
|
||||||||||||
Lease liability
|
67,000
|
97,689
|
-
|
164,689
|
||||||||||||
Other liabilities
|
3,000
|
3,683
|
-
|
6,683
|
||||||||||||
Total non-current liabilities
|
1,130,000
|
542,920
|
-
|
1,672,920
|
||||||||||||
Borrowings
|
9,000
|
-
|
-
|
9,000
|
||||||||||||
Lease liability
|
18,000
|
14,754
|
-
|
32,754
|
||||||||||||
Trade and other payables
|
235,000
|
204,622
|
(433
|
)
|
439,189
|
|||||||||||
Current tax liabilities
|
68,000
|
12
|
-
|
68,012
|
||||||||||||
Other liabilities
|
288,000
|
140,896
|
(27,765
|
)
|
401,131
|
|||||||||||
Total current liabilities
|
618,000
|
360,284
|
(28,198
|
)
|
950,086
|
|||||||||||
Total liabilities
|
1,748,000
|
903,204
|
(28,198
|
)
|
2,623,006
|
|||||||||||
Total net assets
|
8,622,000
|
1,272,433
|
5,096,420
|
14,990,853
|
(1) |
The Just Eat Takeaway.com Group’s net assets as at 30 June 2020 have been extracted, without material adjustment, from the Just Eat Takeaway.com H1 2020 unaudited interim condensed consolidated financial statements, which are incorporated
by reference into this document.
|
(2) |
The Grubhub Group’s net assets as at 30 June 2020 have been extracted from Grubhub’s unaudited condensed consolidated balance sheet as at 30 June 2020 included in the unaudited interim condensed consolidated financial statements for the
six months ended 30 June 2020 which is included in Section A of Part VI (Historical Information relating to Grubhub) of this Circular, as adjusted to the Company’s accounting policies and presentation.
A reconciliation of Grubhub’s unaudited condensed consolidated balance sheet to the Company’s accounting policies and presentation is presented below:
|
Grubhub balance
sheet line items
|
Grubhub balance
sheet line
items as at
30 June 2020
(Note a)
|
Company balance
sheet line items
|
Grubhub balance
sheet as at
30 June 2020
under the Company’s
balance sheet
presentation
(Note b)
|
IFRS
adjustments
(Note c)
|
Grubhub balance
sheet as at
30 June 2020
under the Company’s
balance sheet
presentation and
after IFRS
adjustments
|
Translated
into the
Company’s
reporting
currency
(Note d)
|
|||||||||||||
US$’000 | US$’000 | US$’000 | US$’000 | €’000 |
|||||||||||||||
Assets
|
|||||||||||||||||||
Goodwill
|
1,007,968
|
Goodwill
|
1,007,968
|
2,675
|
1,010,643
|
895,960
|
|||||||||||||
Acquired intangible assets, net of amortization
|
476,309
|
Other intangible assets
|
573,197
|
65
|
573,262
|
508,211
|
|||||||||||||
Property and equipment, net of depreciation and amortization
|
212,772
|
||||||||||||||||||
Operating lease right-of-use asset
|
99,058
|
||||||||||||||||||
311,830
|
Property and equipment
|
214,942
|
(33,509
|
)
|
181,433
|
160,845
|
|||||||||||||
Other assets
|
36,836
|
Other non-current assets
|
36,893
|
—
|
36,893
|
32,707
|
|||||||||||||
Deferred tax assets
|
-
|
4,591
|
4,591
|
4,070
|
|||||||||||||||
Total non-current assets
|
1,833,000
|
(26,178
|
) |
1,806,822
|
1,601,793
|
||||||||||||||
Accounts receivable less allowances for doubtful accounts
|
75,726
|
Trade and other receivables
|
75,669
|
—
|
75,669
|
67,082
|
|||||||||||||
Prepaid expenses and other current assets
|
18,721
|
||||||||||||||||||
Short-term investments
|
48,616
|
||||||||||||||||||
Income tax receivable
|
19,390
|
||||||||||||||||||
86,727
|
Other current assets
|
86,727
|
140
|
86,867
|
77,010
|
||||||||||||||
Cash and cash equivalents
|
484,760
|
Cash and cash equivalents
|
484,760
|
—
|
484,760
|
429,752
|
|||||||||||||
Total current assets
|
647,156
|
140
|
647,296
|
573,844
|
|||||||||||||||
Total assets
|
2,480,156
|
Total assets
|
2,480,156
|
(26,038
|
) |
2,454,118
|
2,175,637 |
||||||||||||
Liabilities
|
|||||||||||||||||||
Long-term debt
|
493,475
|
Borrowings
|
493,475
|
—
|
493,475
|
437,478
|
|||||||||||||
Deferred taxes, non-current
|
11,607
|
Deferred tax liabilities
|
11,607
|
(7,016
|
)
|
4,591
|
4,070
|
||||||||||||
Noncurrent operating lease liability
|
110,193
|
Lease liability
|
110,193
|
—
|
110,193
|
97,689
|
|||||||||||||
Other accruals
|
4,154
|
Other liabilities
|
4,154
|
—
|
4,154
|
3,683
|
|||||||||||||
Total non-current liabilities
|
619,429
|
(7,016
|
)
|
612,413
|
542,920
|
||||||||||||||
Current operating lease liability
|
16,642
|
Lease liability
|
16,642
|
—
|
16,642
|
14,754
|
|||||||||||||
Accounts payable
|
24,508
|
||||||||||||||||||
Restaurant food liability
|
206,306
|
||||||||||||||||||
230,814
|
Trade and other payables
|
230,814
|
—
|
230,814
|
204,622
|
||||||||||||||
Current tax liabilities
|
14
|
—
|
14
|
12
|
|||||||||||||||
Accrued payroll
|
34,166
|
||||||||||||||||||
Other accruals
|
124,555
|
||||||||||||||||||
158,721
|
Other liabilities
|
158,707
|
223
|
158,930
|
140,896
|
||||||||||||||
Total current liabilities
|
406,177
|
223
|
406,400
|
360,284
|
|||||||||||||||
Total liabilities
|
1,025,606
|
Total liabilities
|
1,025,606
|
(6,793
|
)
|
1,018,813
|
903,204
|
||||||||||||
Total net assets
|
1,454,550
|
Total net assets
|
1,454,550
|
(19,245
|
) |
1,435,305
|
1,272,433
|
a. |
The Grubhub Group balance sheet line items are extracted, without material adjustment, from Grubhub’s unaudited condensed consolidated balance sheet at 30 June 2020 which is included in Section A of Part VI (Historical Information relating to Grubhub) of this Circular.
|
b. |
This reflects Grubhub’s unaudited condensed consolidated balance sheet as at 30 June 2020 re-presented to conform to the Company’s line item presentation format.
|
(i) |
Under U.S. GAAP, Grubhub’s “Property and equipment, net of depreciation and amortization” includes $96.9 million of software costs which has been reclassified to “Other Intangible assets” in accordance with the Company’s IFRS balance sheet
presentation.
|
(ii) |
Under U.S. GAAP, Grubhub separately presents operating lease right-of-use assets of $99.1 million which has been reclassified to “Property and equipment” in accordance with the Company’s IFRS balance sheet presentation.
|
(iii) |
Under U.S. GAAP, $48.6 million of “Short-term investments” and $18.7 million of “Prepaid expenses and other current assets” are presented separately. Each has been reclassified to “Other current assets” in accordance with the Company’s
IFRS balance sheet presentation.
|
(iv) |
Under U.S. GAAP, $124.6 million of “Other accruals” and $34.1 million of “accrued payroll” are presented separately. Each has been reclassified to “Other liabilities” in accordance with the Company’s IFRS balance sheet presentation.
|
c. |
Certain IFRS adjustments and reclassifications were made to reflect the difference in accounting policy under the Company’s IFRS accounting policies, as opposed to U.S. GAAP. These adjustments have been disclosed in Section B of Part VI (Historical Information relating to Grubhub) of this Circular.
|
d. |
The Grubhub financial information has been converted from US$ to € using the closing exchange rate of €1:US$1.13 at 30 June 2020.
|
(3) |
The adjustments arising as a result of the Transaction are set out below:
|
€
|
000
|
€
|
000
|
|||||
Estimated Purchase Price Consideration (Note a)
|
6,462,700
|
|
||||||
Less carrying value of net assets acquired as at 30 June 2020:
|
||||||||
Grubhub net assets
|
1,272,433
|
|||||||
Goodwill derecognised
|
(895,960
|
)
|
||||||
Pro forma net assets acquired
|
376,473
|
|||||||
Pro forma goodwill on Transaction
|
6,086,227
|
|||||||
Adjustment to goodwill (before fair value adjustments to assets and liabilities)
|
5,190,267
|
Estimated Grubhub fully diluted shares outstanding*
|
97,681,806
|
|
||
Exchange ratio
|
0.6710
|
|||
Total Company common shares issued
|
65,544,492
|
|
||
Company’s share price**
|
€
|
98.60
|
|
|
Total estimated consideration to be paid (EUR)
|
€
|
6.46 billion | ||
Total estimated consideration to be paid (USD)***
|
US$
|
7.34 billion |
(4) |
No adjustment has been made to reflect the trading results of Just Eat Takeaway.com or Grubhub since 30 June 2020.
|
Adjustments | |||||||||||||||||||||
Takeaway.com Group10
Year ended
31 December 2019
|
Just Eat Group
Year ended
31 December 2019
|
Grubhub Group
Year ended
31 December 2019
|
Transaction and Just Eat Acquisition adjustments
|
Unaudited pro forma
Enlarged Group
|
|||||||||||||||||
€000
|
Note 1
|
Note 2
|
Note 3
|
Note 4
|
|||||||||||||||||
Revenue
|
415,881
|
1,137,870
|
1,172,613
|
—
|
2,726,364
|
||||||||||||||||
Cost of sales
|
(110,892
|
)
|
(451,534
|
)
|
(480,316
|
)
|
—
|
(1,042,742
|
)
|
||||||||||||
Gross profit
|
304,989
|
686,336
|
692,297
|
1,683,622
|
|||||||||||||||||
Staff costs
|
(112,383
|
)
|
(251,123
|
)
|
(277,019
|
)
|
—
|
(640,525
|
)
|
||||||||||||
Other operating expenses
|
(232,874
|
)
|
(287,406
|
)
|
(333,885
|
)
|
(207,827
|
)
|
(1,061,992
|
)
|
|||||||||||
Impairment of goodwill
|
—
|
(105,192
|
)
|
—
|
—
|
|
(105,192
|
)
|
|||||||||||||
Depreciation and Amortization expenses
|
(37,560
|
)
|
(78,006
|
)
|
(105,422
|
)
|
(102,675
|
)
|
(323,663
|
)
|
|||||||||||
Finance expense
|
(16,297
|
)
|
(13,920
|
)
|
(23,249
|
)
|
— |
(53,466
|
)
|
||||||||||||
Gain on joint venture disposal
|
6,020
|
—
|
—
|
— |
6,020
|
||||||||||||||||
Gain on disposal of unconsolidated subsidiaries and other businesses
|
4,678
|
— | 3,309 |
1,369
|
|||||||||||||||||
Share of results of associates
|
—
|
(113,182
|
)
|
—
|
—
|
(113,182
|
)
|
||||||||||||||
Loss before income tax
|
(88,105
|
)
|
(157,815
|
)
|
(47,278
|
)
|
(313,811
|
)
|
(607,009 |
) |
|||||||||||
|
|
||||||||||||||||||||
Income tax (expense) / benefit
|
(27,385
|
)
|
(28,925
|
)
|
(10,083
|
)
|
20,203
|
(46,190
|
)
|
||||||||||||
Loss for the period
|
(115,490
|
)
|
(186,740
|
)
|
(57,361
|
)
|
(293,608
|
)
|
(653,199
|
)
|
(1) | The income statement of the Takeaway.com Group for the year ended 31 December 2019 has been extracted, without material adjustment, from the Takeaway.com audited consolidated financial statements for the year ended 31 December 2019, which are incorporated by reference into this document. |
(2) |
The income statement of the Just Eat Group for the year ended 31 December 2019 has been derived from the Just Eat audited consolidated financial statements for the year ended 31 December 2019, which are incorporated by reference into this
document. The income statement reflects certain reclassifications of Just Eat’s income statement categories to conform to Takeaway.com’s presentation, which are summarized below:
|
10 |
In this Section A of Part VII (Unaudited Pro Forma Financial Information relating to the Enlarged Group) of this Circular (only), the terms “Takeaway.com” and
“Takeaway.com Group” are used to refer to the legacy Takeaway.com business of the Group prior to the Just Eat Acquisition.
|
Just Eat income
statement line items
|
Just Eat income
statement
line items for the
year ended
31 December
2019
(Note a)
|
Company income
statement line items
|
Just Eat Income
Statement
for the
year ended
31 December
2019 under
the Company’s
income
statement
presentation
(Note b)
|
Adjustment
for
accounting for
order pads (Note c)
|
Just Eat Income
Statement
for the
year ended
31 December
2019 under
the Company’s
presentation
and after
adjustments
|
Translated
into the
Company’s
reporting
currency
(Note d)
|
|||||||||||||||
GBP ‘000
|
GBP ‘000
|
GBP ‘000
|
GBP ‘000
|
€
|
‘000
|
||||||||||||||||
Revenues
|
997,300
|
Revenue
|
997,300
|
—
|
997,300
|
1,137,870
|
|||||||||||||||
Cost of sales
|
(376,700
|
)
|
Cost of sales
|
(376,700
|
)
|
(19,052
|
)
|
(395,752
|
)
|
(451,534
|
)
|
||||||||||
Gross profit
|
620,600
|
Gross profit
|
620,600
|
(19,052
|
)
|
601,548
|
686,336
|
||||||||||||||
Impairment of goodwill
|
(92,300
|
)
|
|||||||||||||||||||
Other operating costs
|
(541,700
|
)
|
|||||||||||||||||||
Operating loss
|
(13,400
|
)
|
|||||||||||||||||||
Staff costs
|
(220,100
|
)
|
—
|
(220,100
|
)
|
(251,123
|
)
|
||||||||||||||
Other operating expenses
|
(251,900
|
)
|
—
|
(251,900
|
)
|
(287,406
|
)
|
||||||||||||||
Impairment charges
|
(94,300
|
)
|
2,103
|
(92,197
|
)
|
(105,192
|
)
|
||||||||||||||
Depreciation and
Amortization expenses
|
(79,800
|
)
|
11,431
|
(68,369
|
)
|
(78,006
|
)
|
||||||||||||||
Finance costs
|
(9,300
|
)
|
|||||||||||||||||||
Other gains and losses
|
(11,500
|
)
|
|||||||||||||||||||
Investment revenue
|
600
|
||||||||||||||||||||
(20,200
|
)
|
Finance expense
|
(12,200
|
)
|
—
|
(12,200
|
)
|
(13,920
|
)
|
||||||||||||
Gain on disposal of
unconsolidated subsidiaries
and other businesses
|
4,100
|
4,100
|
4,678
|
||||||||||||||||||
Share of results of associates
|
(99,200
|
)
|
Share of loss of joint ventures / associates
|
(99,200
|
)
|
—
|
(99,200
|
)
|
(113,182
|
)
|
|||||||||||
Loss before income tax
|
(132,800
|
)
|
Loss before income tax
|
(132,800
|
)
|
(5,518
|
)
|
(138,318
|
)
|
(157,815
|
)
|
||||||||||
Income tax (expense) / benefit
|
(26,400
|
)
|
Income tax (expense) / (benefit
|
(26,400
|
)
|
1,048
|
(25,352
|
)
|
(28,925
|
)
|
|||||||||||
Loss for the period
|
(159,200
|
)
|
Loss for the period
|
(159,200
|
)
|
(4,470
|
)
|
(163,670
|
)
|
(186,740
|
)
|
a. |
The Just Eat income statement line items are extracted, without material adjustment, from Just Eat’s audited consolidated income statement for the year ended 31 December 2019, which is incorporated by reference into this document.
|
b. |
This reflects Just Eat’s audited consolidated income statement for the year ended 31 December 2019 re-presented to conform to the Company’s line item presentation format.
|
(i) |
Just Eat’s Other operating costs balance includes £220.1 million of Staff costs, £79.8 million of Depreciation and Amortization expenses. £2.0 million of Impairment charges and £3.4 million of foreign exchange losses (Finance costs) which
have been reclassified to separate financial statement lines in accordance with the Company’s IFRS presentation.
|
(ii). |
Just Eat’s Other gains and losses balance includes £15.5 million which has been reclassified to Other operating expenses and £4.1 million which has been reclassified to Gain on disposal of unconsolidated subsidiaries and other businesses
in accordance with the Company’s IFRS presentation.
|
(iii) |
Just Eat separately presents Investment revenue of £0.6 million which has been reclassified to the Finance expense financial statement line in accordance with the Company’s IFRS presentation.
|
c. |
Under its previous policy, Just Eat elected to capitalize the cost of order pads that are distributed to restaurants for purposes of order fulfilment. The cost for the devices was then amortized over three years. Under Takeaway.com’s
policy, the costs for these devices are expensed immediately. As such, a policy alignment has been recorded to reflect the cost of expensing these devices. The tax adjustment that is recorded in relation to this alignment is based on
statutory tax rate for the UK listed in note 7 below.
|
d. |
The Just Eat financial information has been converted from GBP to € using the average rate for the financial year ended 31 December 2019 of €1:GBP 0.876.
|
(3) |
The income statement of the Grubhub Group for the year ended 31 December 2019 has been extracted from Grubhub’s audited consolidated income statement for the year ended 31 December 2019, which is included in Section A of Part VI (Historical Information relating to Grubhub) of this Circular, as adjusted to the Company’s accounting policies and presentation. A reconciliation of Grubhub’s income statement to the Company’s accounting
policies and presentation is presented below:
|
Grubhub income
statement sheet
line items
|
Grubhub income statement line
items for
the year ended
31 December
2019
(Note a)
|
Company income
statement line items |
Grubhub income statement for
the year ended
31 December
2019 under
the Company’s income statement presentation
(Note b)
|
IFRS
adjustments
(Note c)
|
Grubhub income statement for
the year ended
31 December
2019 under
the Company’s
income
statement presentation
and after IFRS adjustments
|
Translated
into the Company’s
reporting
currency
(Note d)
|
|||||||||||||||
US$’000
|
US$’000
|
US$’000
|
US$’000
|
€
|
’000
|
||||||||||||||||
Revenues
|
1,312,151
|
Revenue
|
1,312,151
|
-
|
1,312,151
|
1,172,613
|
|||||||||||||||
Cost of sales
|
(522,716
|
)
|
(14,757
|
)
|
(537,473
|
)
|
(480,316
|
)
|
|||||||||||||
Gross profit
|
789,435
|
(14,757
|
)
|
774,678
|
692,297
|
||||||||||||||||
Staff costs
|
(289,061
|
)
|
(20,923
|
)
|
(309,984
|
)
|
(277,019
|
)
|
|||||||||||||
Other operating expenses
|
(391,208
|
)
|
17,591
|
(373,617
|
)
|
(333,885
|
)
|
||||||||||||||
Costs and expenses:
|
|||||||||||||||||||||
Operations and support
|
(675,471
|
)
|
|||||||||||||||||||
Sales and marketing
|
(310,299
|
)
|
|||||||||||||||||||
Technology (exclusive of amortization)
|
(115,297
|
)
|
|||||||||||||||||||
General and administrative
|
(101,918
|
)
|
|||||||||||||||||||
Depreciation and amortization
|
(115,449
|
)
|
Depreciation and
Amortization expenses
|
(115,449
|
)
|
(2,518
|
)
|
(117,967
|
)
|
(105,422
|
)
|
||||||||||
Total costs and expenses
|
(1,318,434
|
)
|
|||||||||||||||||||
Loss from operations
|
(6,283
|
)
|
|||||||||||||||||||
Interest expense - net
|
(20,493
|
)
|
Finance expense
|
(20,493
|
)
|
(5,523
|
)
|
(26,016
|
)
|
(23,249
|
)
|
||||||||||
Loss before provision for income taxes
|
(26,776
|
)
|
Loss before income tax
|
(26,776
|
)
|
(26,130
|
)
|
(52,906
|
)
|
(47,278
|
)
|
||||||||||
Income tax (expense) / benefit
|
8,210
|
Income tax (expense) / benefit
|
8,210
|
(19,493
|
) |
(11,283
|
) |
(10,083
|
) |
||||||||||||
Net (loss) attributable to common stockholders
|
(18,566
|
)
|
Loss for the period
|
(18,566
|
)
|
(45,623
|
)
|
(64,189
|
)
|
(57,361
|
)
|
a. |
The Grubhub income statement line items are extracted, without material adjustment, from Grubhub’s audited consolidated income statement for the year ended 31 December 2019, which is included in Section A of Part VI (Historical Information relating to Grubhub) of this Circular.
|
b. |
This reflects Grubhub’s audited consolidated income statement for the year ended 31 December 2019 re-presented to conform to the Company’s line item presentation format.
|
(i) |
Grubhub’s Operations and support balance includes $520.1 million and its Sales and marketing balance includes $2.6 million which have been reclassified to the Cost of sales financial
statement line in accordance with the Company’s IFRS presentation.
|
(ii) |
Grubhub’s Operations and support balance, Sales and marketing balance, Technology balance, and General and administrative balance includes $69.7 million, $70.8 million, $104.8 million, and
$43.8 million, respectively, that have been reclassified to the Staff cost financial statement line in accordance with the Company's IFRS presentation.
|
(iii) |
Grubhub’s Operations and support balance, Sales and marketing balance, Technology balance, and General and administrative balance includes $85.7 million, $236.9 million, $10.5 million, and
$58.1 million, respectively, that have been reclassified to the Other operating expenses financial statement line in accordance with the Company's IFRS presentation.
|
(iv) |
Grubhub’s Interest expense-net balance of $20.5 million has been presented as Finance expense in accordance with the Company's IFRS presentation.
|
c. |
Certain IFRS adjustments and reclassifications were made to reflect the difference in accounting policy and presentation under the Company’s IFRS accounting policies, as opposed to U.S. GAAP. These adjustments have been disclosed in
Section B of Part VI (Historical Information relating to Grubhub) of this Circular.
|
d. |
The Grubhub financial information has been converted from US$ to € using the average rate for the financial year ended 31 December 2019 of €1:US$1.12.
|
(4) |
The adjustment to other operating expenses consists of the costs related to the Transaction, which are estimated to amount to €94.1 million, and costs related to the Just Eat Acquisition, which amount to
€113.7 million, leading to a total adjustment of €207.8 million (reflected as an expense in accordance with IFRS 3).
|
(5) |
The unaudited pro forma income statement does not reflect the effect of any fair value adjustments which may be recorded to acquired assets and liabilities as a result of the Transaction. Upon completion of the purchase price allocation
exercise, which will be finalized after completion of the Transaction, additional depreciation of property, plant and equipment and amortization of Intangible assets, amongst other things, may be required in the Enlarged Group’s financial
statements.
|
(6) |
No adjustment has been made to reflect the trading results of Just Eat Takeaway.com, Just Eat or Grubhub since 31 December 2019.
|
(7) |
The estimated income tax impacts of the pre-tax adjustments are calculated using an statutory rate of 25%, 19%, and 21% in the Netherlands, the United Kingdom, and the United States, respectively, which is
based on preliminary assumptions related to the jurisdictions in which the income (expense) adjustments will be recorded. The blended statutory rate of the Enlarged Group following the Transaction could be significantly different depending
on post-Transaction activities and the geographical mix of profit or loss before taxes.
|
(8) |
A reconciliation of pro forma profit/(loss) before income tax to pro forma Adjusted EBITDA of the Enlarged Group for the year ended 31 December 2019 is set out below:
|
Adjustments | ||||||||||||||||||||||
Takeaway.com
Year ended 31 December 2019
|
Just Eat
Year ended
31 December 2019
|
Grubhub Inc.
Year ended 31 December 2019
|
Transaction and Just Eat Acquisition adjustments
|
Unaudited
pro forma
Enlarged Group
|
||||||||||||||||||
€’000
|
Note 1*
|
Note 2*
|
Note 3*
|
Note 4*
|
||||||||||||||||||
Loss before income tax
|
(88,105
|
)
|
(157,815
|
)
|
(47,278
|
)
|
(313,811
|
)
|
607,009
|
|||||||||||||
Add back items not included in Adjusted EBITDA:
|
||||||||||||||||||||||
- Finance income and expenses and foreign exchange losses
|
16,297
|
13,920
|
23,249
|
-
|
53,466
|
|||||||||||||||||
- Share-based payments
|
2,848
|
12,094
|
83,827
|
-
|
98,769
|
|||||||||||||||||
- Gain on joint venture disposal
|
(6,020
|
)
|
-
|
-
|
-
|
(6,020
|
)
|
|||||||||||||||
- Share of loss of joint ventures
|
-
|
113,182
|
-
|
-
|
113,182
|
|||||||||||||||||
- Gain on disposal of unconsolidated subsidiaries and other businesses
|
-
|
(4,678
|
)
|
-
|
3,309
|
(1,369
|
)
|
|||||||||||||||
- Depreciation, amortization and impairments
|
37,560
|
183,198
|
105,422
|
102,675
|
428,855
|
|||||||||||||||||
Acquisition, related transaction, restructuring and integration costs
|
49,691
|
46,665
|
3,668
|
207,827
|
307,851
|
|||||||||||||||||
Adjusted EBITDA
|
12,271
|
206,566
|
168,888
|
-
|
387,725
|
(A) |
The related pro forma adjustments give appropriate effect to those criteria, and
|
(B) |
The pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.
|
(A) |
The unaudited pro forma consolidated financial information has been properly compiled on the basis stated in Part VII (Section A: Unaudited Pro Forma Financial Information relating to the Enlarged Group)
of the Circular, and
|
(B) |
Such basis is consistent with the accounting policies of the Company as described in the notes to the IFRS consolidated financial statements of the Company for the year ended 31 December 2019.
|
1. |
Responsibility
|
2. |
Just Eat Takeaway.com information
|
3. |
New Just Eat Takeaway.com Shares and New Just Eat Takeaway.com ADSs
|
4. |
Just Eat Takeaway.com Boards
|
Name
|
Position
|
|
Jitse Groen
|
Chief Executive Officer
|
|
Brent Wissink
|
Chief Financial Officer
|
|
Jörg Gerbig
|
Chief Operating Officer
|
Name
|
Position
|
|
Adriaan Nühn
|
Chairman of the Supervisory Board
|
|
Corinne Vigreux
|
Vice-Chairman of the Supervisory Board
|
|
Gwyn Burr
|
Member of the Supervisory Board
|
|
Jambu Palaniappan
|
Member of the Supervisory Board
|
|
Ron Teerlink
|
Member of the Supervisory Board
|
5. |
Details of the service contracts of the Managing Directors
|
6. |
Managing Directors’ interests in Just Eat Takeaway.com Shares
|
Name of Managing Director
|
Number of
Just Eat Takeaway.com
Shares held as at the
Latest Practicable Date
(Note 1)
|
Percentage of issued
share capital as at the
Latest Practicable Date (%)
|
Number of
Just Eat Takeaway.com
Shares held immediately
following Admission
(Note 2)
|
Percentage of issued
share capital immediately
following Admission (%)
(Note 2)
|
||||||
Jitse Groen
|
15,304,796
|
10.3
|
15,304,796
|
7.1
|
||||||
Brent Wissink
|
150,581
|
0.1
|
150,581
|
0.1
|
||||||
Jörg Gerbig
|
340,000
|
0.2
|
340,000
|
0.2
|
The main conditions of share plans |
Information regarding FY 2019 |
||||||||||||||||||||||||
Name of Director, position
|
Specifications
of LTIP
performance
period
|
Award date
|
Vesting date
|
End of holding period
|
Exercise period
|
Strike
price
of the
share
(in €)
|
Share
option
awarded
at the
beginning
of the
year
|
Share
option
awarded
|
Share
option
vested
|
Market
value of
share
option
vested
(in €)
|
Share
option
subject
to a
performance
condition
|
Share
option awarded
and uninvested
|
Share
option
subject
to a
holding
period
|
||||||||||||
J. Groen - CEO
|
2017-2019
|
31.12.2016
|
31.12.2019
|
n.a.
|
1.1.2020 to
31.12.2026
|
23.37
|
7,225
|
—
|
5,780
|
475,116
|
—
|
—
|
n.a.
|
||||||||||||
2018-2020
|
31.12.2017
|
31.12.2020
|
n.a.
|
1.1.2021 to
31.12.2027
|
49.06
|
12,340
|
—
|
—
|
—
|
12,340
|
12,340
|
n.a
|
|||||||||||||
2019-2021
|
31.12.2018
|
31.12.2021
|
n.a.
|
1.1.2022 to
31.12.2028
|
54.62
|
11,655
|
—
|
—
|
—
|
11,655
|
11,655
|
n.a
|
|||||||||||||
B. Wissink – CFO
|
2017-2019
|
31.12.2016
|
31.12.2019
|
n.a.
|
1.1.2020 to
31.12.2026 |
23.37
|
6,322
|
—
|
5,058
|
415,768
|
—
|
—
|
n.a
|
||||||||||||
2018-2020
|
31.12.2017
|
31.12.2020
|
n.a.
|
1.1.2021 to
31.12.2027
|
49.06
|
10,798
|
—
|
—
|
—
|
10,798
|
10,798
|
n.a
|
|||||||||||||
2019-2021
|
31.12.2018
|
31.12.2021
|
n.a.
|
1.1.2022 to
31.12.2028
|
54.62
|
10,198
|
—
|
—
|
—
|
10,198
|
10,198
|
n.a
|
|||||||||||||
J. Gerbig – COO
|
2017-2019
|
31.12.2016
|
31.12.2019
|
n.a.
|
1.1.2020 to
31.12.2026
|
23.37
|
5,870
|
—
|
4,697
|
386,093
|
—
|
|
n.a
|
||||||||||||
2018-2020
|
31.12.2017
|
31.12.2020
|
n.a.
|
1.1.2021 to
31.12.2027
|
49.06
|
10,027
|
—
|
—
|
—
|
10,027
|
10,027
|
n.a
|
|||||||||||||
2019-2021
|
31.12.2018
|
31.12.2021
|
n.a.
|
1.1.2022 to
31.12.2028
|
54.62
|
9,470
|
—
|
—
|
—
|
9,470
|
9,470
|
n.a
|
7. |
Grubhub key individuals
|
Name
|
Position
|
|
Matthew Maloney
|
Chief Executive Officer
|
|
Adam DeWitt
|
President, Chief Financial Officer and Treasurer
|
|
Margo Drucker
|
Chief Legal Officer and Secretary
|
|
Samuel Hall
|
Chief Product Officer
|
|
Brandt Kucharski
|
Chief Accounting Officer
|
8. |
Major interests in Just Eat Takeaway.com Shares
|
Name of Shareholder
|
Number of Just Eat
Takeaway.com Shares as at
the Latest Practicable Date
|
Percentage of issued share
capital as at the Latest Practicable
Date (%)
|
Number of Just Eat
Takeaway.com Shares as at Admission
|
Percentage of issued share capital as at Admission (%)
|
||||
Morgan Stanley
|
25,433,913
|
17.1
|
26,569,156
|
12.4
|
||||
Gribhold
|
15,304,796
|
10.3
|
15,304,796
|
7.1
|
||||
Delivery Hero SE
|
14,900,000
|
10.0
|
14,900,000
|
7.0
|
||||
BlackRock, Inc.
|
8,762,375
|
5.9
|
14,050,044
|
6.6
|
||||
Baillie Gifford & Co.
|
7,453,304
|
5.0
|
10,251,790
|
4.8
|
||||
Cat Rock Capital Management
|
6,458,948
|
4.3
|
6,458,948
|
3.0
|
||||
Capital Group Holdings
|
6,058,545
|
4.1
|
6,058,545
|
2.8
|
||||
AKO Capital LLP
|
4,512,856
|
3.0
|
4,512,856
|
2.1
|
||||
The Vanguard Group, Inc.
|
3,756,938
|
2.5
|
9,391,188
|
4.4
|
||||
Caledonia (Private) Holdings Pty Ltd.
|
-
|
-
|
11,097,121
|
5.2
|
11
|
This table reflects filings with the AFM register of direct and indirect shareholdings, whether actually or potentially held, as at the Latest Practicable Date and does not, for the avoidance of doubt, convey a
statement of the Company’s views as to whether or not any such shareholder is entitled to hold such shares.
|
9. |
Material contracts
|
(a) |
Merger Agreement
|
(b) |
Relationship Agreement
|
i. |
Pursuant to the Relationship Agreement, following DH Completion, Delivery Hero will have the right to designate one person for appointment to the Supervisory Board (provided that such person is independent),
who shall be a member of the audit committee of the Supervisory Board (if installed). The right to designate a person for appointment to the Supervisory Board will expire on the date that Delivery Hero holds less than 9.99% of the Company’s
issued and outstanding share capital (provided that this right will not expire as long as Delivery Hero’s (deemed) shareholding in the Company is equal to or exceeds 9.99%, taking into account the number of shares issuable to Delivery Hero
under the transferable call option over all such shares in the Company that may not be issued to Delivery Hero at DH Completion (the “Consideration Shares Call Option”)), and the designated
Supervisory Board director will resign as of the Company’s first general meeting that is convened thereafter (unless the Supervisory Board unanimously decides otherwise). The appointment of such Delivery Hero Supervisory Board nominee is
subject to Delivery Hero having obtained a declaration of no-objection (verklaring van geen bezwaar) from the Dutch Central Bank.
|
ii. |
In addition, the parties have agreed to a standstill period of four years following DH Completion, during which time Delivery Hero and its subsidiaries, with certain exceptions (including a right to prevent dilution of Delivery Hero’s
shareholding in the Company after any dilution in connection with (re)financing the cash consideration of the DH Transaction), shall, in particular, not directly or indirectly in any way effect or cause to effect any increases in their
shareholding in the Company through any financial instruments or related derivative securities.
|
iii. |
During the standstill period, Delivery Hero and its subsidiaries may sell, transfer and otherwise dispose of any Company financial instruments held by them, but may not make such a disposal to certain restricted parties active in the
online food delivery industry.
|
iv. |
During the standstill period and up to three years after that period, Delivery Hero may only vote up to a limited number of shares in respect of any proposal relating to (i) mergers, acquisitions, divestments, or sales or purchases of any
assets, including the financing thereof, (ii) any proposal pursuant to article 2:107a Dutch Civil Code and (iii) any issue of Company financial instruments (or any exclusion or amendment of any pre-emptive rights in relation thereto) by the
Company or its affiliates if such issue (a) relates to an item under (i), or (b) is required by the financial position of the Company. In case of a conflict of interest on such matters, Delivery Hero may not vote at all. If Delivery Hero has
announced a public offer for the Company in accordance with the following two paragraphs of this section, or if Delivery Hero has declared an offer in accordance with the last paragraph of this section unconditional, the voting restrictions
set out in this paragraph cease to be effective.
|
v. |
If, during the standstill period, a recommended public offer for the Company is announced, Delivery Hero may submit a proposal to the Supervisory Board to make a public offer for the Company. If the Supervisory Board determines that the
proposal is superior, it will allow Delivery Hero to make such superior offer within 10 business days thereafter.
|
vi. |
If, during the standstill period, an unsolicited public offer for the Company is announced, Delivery Hero may submit a proposal to the Supervisory Board to make a public offer for the Company if it is allowed to do so by the Supervisory
Board (in its sole discretion, acting in good faith and in compliance with its fiduciary duties). If the Supervisory Board determines that the proposal is superior, it will allow Delivery Hero to make such superior offer within 10 business
days thereafter.
|
vii. |
After the standstill period, Delivery Hero (i) may only make a public offer for the Company if such offer at least contains, as a condition precedent to declaring such offer unconditional (gestand doen),
which condition may only be waived by Delivery Hero with the prior approval of the Supervisory Board, a minimum acceptance level threshold of at least 67%, and (ii) may not trigger any applicable obligation to make a mandatory offer pursuant
to article 5:70 of the Dutch Financial Supervision Act (Wet op het financieel toezicht) for all shares in the Company.
|
(c) |
Convertible Bonds 2019
|
i. |
the Convertible Bonds 2019 bear interest at the rate of 2.25% per annum payable semi-annually in arrear in equal instalments on 25 January and 25 July of each year;
|
ii. |
unless previously redeemed, converted or purchased and cancelled, each Convertible Bond 2019 shall be redeemed at its principal amount together with accrued and unpaid interest on 25 January 2024 (the “2019
Bonds Maturity Date”);
|
iii. |
the Convertible Bonds 2019 constitute direct, unconditional, unsubordinated and (subject to the negative pledge) unsecured obligations of Just Eat Takeaway.com, ranking pari passu and without
preference among themselves and at least equally with all other unsecured and unsubordinated obligations of Just Eat Takeaway.com;
|
iv. |
holders of the Convertible Bonds 2019 (each a “2019 Bondholder”) have the right to convert their Convertible Bonds 2019 into Just Eat Takeaway.com Shares at any time before: (i) the seventh business
day prior to the 2019 Bonds Maturity Date; or (ii) if the Convertible Bonds 2019 are called for redemption prior to the 2019 Bonds Maturity Date, the seventh business day prior the redemption date;
|
v. |
the initial conversion price of the Convertible Bonds 2019 is €69.525, representing an initial conversion premium of 35% above the price of a Just Eat Takeaway.com Share on the pricing date;
|
vi. |
the conversion price will be adjusted on the occurrence of certain events, including a change of control of Just Eat Takeaway.com, a merger event or other corporate actions, such as the sale of Just Eat Takeaway.com Shares at a discount of
5% or more compared to market price at the time of sale, stock splits or consolidations, and certain dividends and distributions;
|
vii. |
the Convertible Bonds 2019 contain customary capital markets negative pledge and event of default provisions, including non-payment, failure to issue or transfer and deliver Just Eat Takeaway.com Shares upon conversion, breach of
undertakings, cross default, certain insolvency events, illegality or cessation of business;
|
viii. |
the Convertible Bonds 2019 are redeemable at their principal amount together with accrued and unpaid interest in the following circumstances:
|
o |
at the option of Just Eat Takeaway.com, on or after 9 February 2022 if the value of a Just Eat Takeaway.com Share exceeds 130% of the conversion price over a certain period;
|
o |
at the option of Just Eat Takeaway.com, if conversion rights have been exercised and/or purchases (and corresponding cancellations) and/or redemptions effected in respect of 85% or more in principal amount of the Convertible Bonds 2019
originally issued;
|
o |
following occurrence of a change of control of Just Eat Takeaway.com, each 2019 Bondholder has the right to require Just Eat Takeaway.com to redeem the Convertible Bonds 2019 held by that 2019 Bondholder; and
|
o |
at the option of Just Eat Takeaway.com, if Just Eat Takeaway.com has or will become obliged to pay additional amounts in respect of payments of interest on the Convertible Bonds 2019 as a result of any change in tax law, subject to the
right of 2019 Bondholders to elect to receive interest net of tax instead of their Convertible Bonds 2019 being redeemed; and
|
ix. |
the Convertible Bonds 2019 are governed by, and contributed in accordance with, Dutch law.
|
(d) |
Convertible Bonds 2020
|
i. |
the Convertible Bonds 2020 bear interest at the rate of 1.25% per annum payable semi-annually in arrear in equal instalments on 30 April and 30 October of each year;
|
ii. |
unless previously redeemed, converted or purchased and cancelled, each Convertible Bond shall be redeemed at its principal amount together with accrued and unpaid interest on 30 April 2026 (the “2020 Bonds Maturity Date”);
|
iii. |
the Convertible Bonds 2020 constitute direct, unconditional, unsubordinated and (subject to the negative pledge) unsecured obligations of Just Eat Takeaway.com, ranking pari
passu and without preference among themselves and at least equally with all other unsecured and unsubordinated obligations of Just Eat Takeaway.com;
|
iv. |
holders of the Convertible Bonds 2020 (each a “2020 Bondholder”) have the right to convert their Convertible Bonds 2020 into Just Eat Takeaway.com Shares at any time
before: (i) the seventh business day prior to the 2020 Bonds Maturity Date; or (ii) if the Convertible Bonds 2020 are called for redemption prior to the 2020 Bonds Maturity Date, the seventh business day prior the redemption date;
|
v. |
the initial conversion price of the Convertible Bonds 2020 is €121.80, representing an initial conversion premium of 40% above the price of a Just Eat Takeaway.com Share on the pricing date;
|
vi. |
the conversion price will be adjusted on the occurrence of certain events, including a change of control of Just Eat Takeaway.com, a merger event or other corporate actions, such as the sale of Just Eat
Takeaway.com Shares at a discount of 5% or more compared to market price at the time of sale, stock splits or consolidations, and certain dividends and distributions;
|
vii. |
the Convertible Bonds 2020 contain customary capital markets negative pledge and event of default provisions, including non-payment, failure to issue or transfer and deliver Just Eat Takeaway.com Shares upon
conversion, breach of undertakings, cross default, certain insolvency events, illegality or cessation of business;
|
viii. |
the Convertible Bonds 2020 are redeemable at their principal amount together with accrued and unpaid interest in the following circumstances:
|
o |
at the option of Just Eat Takeaway.com, on or after 15 May 2023 and up to but excluding 15 May 2024, if the value of a Just Eat Takeaway.com Share exceeds 150% of the conversion price over a certain period;
|
o |
at the option of Just Eat Takeaway.com, on or after 15 May 2024, if the value of a Just Eat Takeaway.com Share exceeds 130% of the conversion price over a certain period;
|
o |
at the option of Just Eat Takeaway.com, if conversion rights have been exercised and/or purchases (and corresponding cancellations) and/or redemptions effected in respect of 85% or more in principal amount of the Convertible Bonds 2020
originally issued;
|
o |
following occurrence of a change of control of Just Eat Takeaway.com, each 2020 Bondholder has the right to require Just Eat Takeaway.com to redeem the Convertible Bonds 2020 held by that 2020 Bondholder; and
|
o |
at the option of Just Eat Takeaway.com, if Just Eat Takeaway.com has or will become obliged to pay additional amounts in respect of payments of interest on the Convertible Bonds 2020 as a result of any change in tax law, subject to the
right of 2020 Bondholders to elect to receive interest net of tax instead of their Convertible Bonds 2020 being redeemed; and
|
ix. |
the Convertible Bonds 2020 are governed by, and contributed in accordance with, Dutch law.
|
(a) |
Merger Agreement
|
(b) |
Credit Agreement
|
(c) |
Indenture
|
(d) |
Share purchase agreement
|
10. |
Significant litigation
|
11. |
Working capital
|
12. |
Consents
|
13. |
No significant change
|
14. |
Related party transactions
|
€’000
|
Jitse Groen (CEO)
|
Brent Wissink (CFO)
|
Jörg Gerbig (COO)
|
Total
|
Short-term benefits
|
479
|
438
|
404
|
1,321
|
Post-employment benefits
|
50
|
50
|
46
|
146
|
Share-based payments
|
191
|
176
|
172
|
539
|
Total
|
720
|
664
|
662
|
2,006
|
€’000
|
Total
|
Adriaan Nühn (Chairman)
|
65
|
Corinne Vigreux
|
50
|
Ron Teerlink
|
50
|
Johannes Reck
|
38
|
Closing balance
|
203
|
15. |
Sources of financial information
|
(A) |
financial information relating to the Company has been extracted without material adjustment from the audited consolidated financial statements of the Company for FY 2019 (and, for the avoidance of doubt, such information relates to the
Company prior to the Just Eat Acquisition) and from the Just Eat Takeaway.com H1 2020 unaudited interim condensed consolidated financial statements; and
|
(B) |
financial information relating to Grubhub has been extracted without material adjustment from Section A of Part VI (Historical Financial Information relating to Grubhub) of this Circular.
|
16. |
Information incorporated by reference
|
Reference document
|
Information incorporated by reference into this document
|
Page numbers in
reference document
|
Just Eat Takeaway.com 2019 Prospectus
|
Information on related party transactions for FY 2018 in the sub-section entitled “Related party transactions” in the section entitled “Takeaway.com
Existing Shareholders and Related Party Transactions” of the Part entitled “Additional Information”, which incorporates by reference the 2018 Annual Report p.169 (“Note 27 – Related party
transactions”)
|
p.152
|
Just Eat Takeaway.com 2019 Prospectus
|
Information on related party transactions for FY 2017 in the sub-section entitled “Related party transaction” of the section entitled “Takeaway.com
Existing Shareholders and Related Party Transactions” of the Part entitled “Additional Information”, which incorporates by reference the 2017 Annual Report p.173-174 (“Note 25 – Related party
transactions”)
|
p.152
|
2019 Annual Report12
|
Entirety of reference document
|
All
|
Just Eat Takeaway.com H1 2020 unaudited interim condensed consolidated financial statements
|
The H1 2020 results set out in the section entitled “Condensed Consolidated Financial Statements”
|
pp.17 -29
|
Just Eat Limited 2019 Annual Report and Accounts
|
Independent auditor’s report, consolidated financial statements and notes to the consolidated financial statements as set out in the section entitled “Financial Statements”
|
pp.33 – 83
|
12
|
For the avoidance of doubt, the 2019 Annual Report contains the accounts of the legacy Takeaway.com business of the Group for FY 2019, prior to the Just Eat Acquisition
|
17. |
Documents available for inspection
|
● |
the Articles;
|
● |
Deloitte’s report on the unaudited reconciliation of the historical financial information relating to Grubhub set out in Part VI (Historical Financial Information relating to Grubhub);
|
● |
Deloitte’s report on the unaudited pro forma financial information on the Enlarged Group set out in Part VII (Unaudited Pro Forma Financial Information relating to the Enlarged Group);
|
● |
the letters of consent referred to in paragraph 12 of this Part VIII (Additional Information);
|
● |
the Merger Agreement;
|
● |
the Just Eat Takeaway.com 2019 Prospectus;
|
● |
the 2019 Annual Report;
|
● |
the Just Eat Takeaway.com H1 2020 unaudited interim condensed consolidated financial statements;
|
● |
the Just Eat Limited 2019 Annual Report and Accounts; and
|
● |
this document.
|
Management Board
|
Jitse Groen (Chief Executive Officer)
Brent Wissink (Chief Financial Officer)
Jörg Gerbig (Chief Operating Officer)
|
Supervisory Board
|
Adriaan Nühn (Chairman of the Supervisory Board)
Corinne Vigreux (Vice-Chairman of the Supervisory Board)
Gwyn Burr (Member of the Supervisory Board)
Jambu Palaniappan (Member of the Supervisory Board)
Ron Teerlink (Member of the Supervisory Board)
|
Company Secretary
|
Sophie Versteege
|
Registered Office
|
Oosterdoksstraat 80
1011 DK Amsterdam
The Netherlands
|
Website
|
https://justeattakeaway.com
|
Sponsor
|
Merrill Lynch International
2 King Edward Street
London EC1A 1HQ
United Kingdom
|
Joint Financial Advisors
|
Bank of America Merrill Lynch International DAC, Amsterdam Branch
Amstelplein 1 Rembrandt Tower,
Floor 27,
1096 HA Amsterdam
The Netherlands
|
Goldman Sachs International
25 Shoe Lane,
Holborn,
London EC4A 4AU
United Kingdom
|
|
Legal Advisors
(Dutch Law)
|
De Brauw Blackstone Westbroek N.V.
Claude Debussylaan 80
1082 MD Amsterdam
The Netherlands
|
Legal Advisors (English Law)
|
Slaughter and May
One Bunhill Row
London EC1Y 8YY
United Kingdom
|
Legal Advisors
(US Law)
|
Cravath, Swaine & Moore LLP
825 8th Avenue
New York, NY 10019
United States of America
|
Reporting Accountants
|
Deloitte Accountants B.V.
Gustav Mahlerlaan 2970
1081 LA Amsterdam
The Netherlands
|
Registrar (UK)
|
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
United Kingdom
|
“2017 Annual Report”
|
means the annual report of the Just Eat Takeaway.com Group for FY 2017;
|
“2018 Annual Report”
|
means the annual report of the Just Eat Takeaway.com Group for FY 2018;
|
“2019 AGM”
|
means the annual general meeting of the Company held on 14 May 2019;
|
“2019 Annual Report”
|
means the annual report of the Just Eat Takeaway.com Group for FY 2019;
|
“2019 Bondholder”
|
has the meaning given to such term in paragraph 9(c) of Part VIII (Additional information) of this document;
|
“2019 Bonds Maturity Date”
|
has the meaning given to such term in paragraph 9(c) of Part VIII (Additional Information) of this document;
|
“2020 Bondholder”
|
has the meaning given to such term in paragraph 9(d) of Part VIII (Additional Information) of this document;
|
“2020 Bonds Maturity Date”
|
has the meaning given to such term in paragraph 9(d) of Part VIII (Additional Information) of this document;
|
“ABN AMRO”
|
means ABN AMRO Bank N.V. department Corporate Broking (HQ7212), Gustav Mahlerlaan 10, 1082 PP Amsterdam, the Netherlands;
|
“Admission”
|
means (i) UK Admission, (ii) NL Admission and (iii) ADS Admission;
|
“ADS Admission”
|
means admission of the New Just Eat Takeaway.com ADSs to listing and trading on the NYSE or the NASDAQ;
|
“AFM”
|
means the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten);
|
“Articles”
|
means the articles of association of Just Eat Takeaway.com;
|
“BofA Securities”
|
means Bank of America Merrill Lynch International DAC, Amsterdam Branch, a subsidiary of Bank of America Corporation;
|
“Business Day”
|
means a day (other than a Saturday, Sunday or public or bank holiday in England, the City of New York, United States of America and/or the Netherlands) on which banks are generally open for business in London
and Amsterdam other than solely for trading and settlement in Euro;
|
“CDI”
|
means a CREST depositary interest issued by CREST Depository whereby CREST Depository will hold overseas securities on bare trust for the CREST member to whom it has issued a depositary interest;
|
“CEO”
|
means chief executive officer;
|
“CET”
|
means Central European Time;
|
“CFIUS”
|
means the Committee on Foreign Investment in the United States of America;
|
“CFO”
|
means chief financial officer;
|
“Circular”
|
means this document;
|
“Completion”
|
means completion of the Transaction pursuant to the Merger Agreement;
|
“Conditions”
|
means the conditions to Completion as set out in the Merger Agreement which are summarized in Part V Key Transaction Documents) of this document;
|
“Convertible Bonds”
|
means, together, the Convertible Bonds 2019 and the Convertible Bonds 2020;
|
“Convertible Bonds 2019”
|
has the meaning given to such term in paragraph 9(c) of Part VIII (Additional Information) of this document;
|
“Convertible Bonds 2020”
|
has the meaning given to such term in paragraph 9(d) of Part VIII (Additional Information) of this document;
|
“Convocation of Extraordinary General Meeting”
|
means the notice of general meeting contained at Part I (Convocation of Extraordinary General Meeting) of this document;
|
“COO”
|
means chief operating officer;
|
“CREST”
|
means the system of paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear in accordance with Uncertificated Securities Regulations 2001 (SI 2001/3755);
|
“CREST Depository”
|
means CREST Depository Limited, a company incorporated in England and Wales with registered number 3133256;
|
“CREST Manual”
|
means the CREST manual issued by Euroclear UK;
|
“Delivery Hero”
|
means Delivery Hero SE, a company incorporated in Germany whose shares are listed on the Prime Standard segment of the Frankfurt Stock Exchange;
|
“Deloitte”
|
means Deloitte Accountants B.V.;
|
“DGCL”
|
means the General Corporation Law of the State of Delaware, United States of America;
|
“Disclosure Guidance and Transparency Rules”
|
means the disclosure guidance and transparency rules made by the FCA and forming part of the FCA’s handbook of rules and guidance;
|
“Enlarged Group”
|
means the Just Eat Takeaway.com Group as enlarged by the Transaction with effect from Completion;
|
“EU”
|
means the European Union;
|
“Euroclear UK”
|
means Euroclear UK & Ireland Limited, a company incorporated in England and Wales with registered number 02878738;
|
“Euronext Amsterdam”
|
means Euronext in Amsterdam, a regulated market of Euronext Amsterdam N.V.;
|
“Exchange Act”
|
means the United States Securities and Exchange Act of 1934 (as amended);
|
“Extraordinary General Meeting” or “EGM”
|
means the extraordinary general meeting of Just Eat Takeaway.com proposed to be held at BIMHUIS Amsterdam, Piet Heinkade 3, Amsterdam, the Netherlands at 14:00 CET on 7 October 2020 to approve the Resolutions,
the notice of which is contained in Part I (Convocation of Extraordinary General Meeting) of this document;
|
“FCA”
|
means the Financial Conduct Authority of the United Kingdom;
|
“FMSA”
|
the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht);
|
“Form F-4”
|
means the registration statement on Form F-4 filed with the SEC relating to the registration under the Securities Act of the New Just Eat Takeaway.com Shares;
|
“FSMA”
|
means the Financial Services and Markets Act 2000, as amended;
|
“FY 2017”
|
means the financial year ended 31 December 2017;
|
“FY 2018”
|
means the financial year ended 31 December 2018;
|
“FY 2019”
|
means the financial year ended 31 December 2019;
|
“FY 2020”
|
means the financial year ended 31 December 2020;
|
“General Meeting”
|
means the general meeting of Just Eat Takeaway.com (the corporate body) or the meeting in which shareholders and all other persons entitled to attend general meetings of Just Eat Takeaway.com assemble, as the
context requires;
|
“Grubhub”
|
means Grubhub Inc., a Delaware corporation;
|
“Grubhub Group”
|
means Grubhub and its subsidiaries from time to time;
|
“Grubhub Stockholder”
|
means a holder of Grubhub Shares from time to time;
|
“Grubhub Stockholder Meeting”
|
means a meeting of Grubhub Stockholders to consider and vote upon the adoption of the Merger Agreement and such other matters as may be legally required, expected to be held in H1 2021;
|
“Grubhub Shares”
|
means all shares of common stock, with a par value $0.0001 per share, in Grubhub issued and outstanding from time to time;
|
“H1 2020”
|
means the six-month period ended 30 June 2020;
|
“H1 2021”
|
means the six-month period ended 30 June 2021;
|
“HSR Act”
|
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
|
“Just Eat”
|
means Just Eat Limited (formerly Just Eat plc), a limited company incorporated in England and Wales with registered number 06947854;
|
“Just Eat Acquisition”
|
means the acquisition by the Company of the entire issued share capital of Just Eat plc, which became unconditional in all respects on 31 January 2020;
|
“Just Eat Group”
|
means Just Eat and its subsidiaries from time to time;
|
“Just Eat Limited 2019 Annual Report and Accounts”
|
means the annual report and accounts of Just Eat Limited for FY 2019;
|
“Just Eat Takeaway.com” or the “Company”
|
means Just Eat Takeaway.com N.V., a public company with limited liability (naamloze vennootschap) incorporated under the laws of the Netherlands;
|
“Just Eat Takeaway.com 2019 Prospectus”
|
means the prospectus published by Just Eat Takeaway.com on 22 October 2019 in connection with (i) the application for admission of Just Eat Takeaway.com Shares to listing on the FCA’s Official List of the FCA
and to trading on the London Stock Exchange’s Main Market and (ii) the application for admission of new Just Eat Takeaway.com Shares to listing and trading on Euronext Amsterdam;
|
“Just Eat Takeaway.com Boards”
|
means the Management Board and the Supervisory Board together;
|
“Just Eat Takeaway.com Group” or the “Group”
|
means Just Eat Takeaway.com and its subsidiaries from time to time;
|
“Just Eat Takeaway.com Shareholder”
|
means a holder of Just Eat Takeaway.com Shares from time to time;
|
“Just Eat Takeaway.com Shares”
|
means the ordinary shares of €0.04 each in the share capital of Just Eat Takeaway.com from time to time;
|
“Latest Practicable Date”
|
means 21 August 2020, being the latest practicable date for the calculation and inclusion of information prior to the publication of this Circular;
|
“Listing Rules”
|
means the listing rules made by the FCA pursuant to FSMA governing, inter alia, admission of securities to the Official List of the FCA;
|
“London Stock Exchange”
|
means the London Stock Exchange plc or any recognized investment exchange for the purposes of the FMSA that may take over the functions of the London Stock Exchange plc;
|
“Management Board”
|
means the management board of Just Eat Takeaway.com;
|
“Managing Director”
|
means a member of the Management Board;
|
“Market Abuse Regulation” or “MAR”
|
means Regulation (EU) No 596/2014;
|
“Merger Agreement”
|
means the agreement and plan of merger dated 10 June 2020 and made between Just Eat Takeaway.com, Grubhub, Merger Sub I and Merger Sub II, providing for the acquisition by Just Eat Takeaway.com of all Grubhub
Shares;
|
“Merger Sub I”
|
means Checkers Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of Just Eat Takeaway.com;
|
“Merger Sub II”
|
means Checkers Merger Sub II, Inc., a Delaware corporation and a wholly-owned subsidiary of Just Eat Takeaway.com;
|
“NASDAQ”
|
means the Nasdaq Global Select Market;
|
“Merrill Lynch”
|
Merrill Lynch International;
|
“New Just Eat Takeaway.com ADSs”
|
means the American Depositary Shares representing Just Eat Takeaway.com Shares that are to be issued to Grubhub Stockholders in connection with the Transaction;
|
“New Just Eat Takeaway.com Shares”
|
means the Just Eat Takeaway.com Shares underlying the New Just Eat Takeaway.com ADSs;
|
“NL Admission”
|
means admission of the New Just Eat Takeaway.com Shares to listing and trading on Euronext Amsterdam;
|
“NYSE”
|
means the New York Stock Exchange;
|
“Prospectus”
|
means a prospectus to be prepared by the Company pursuant to the Prospectus Regulation in respect of the admission to listing and trading on Euronext Amsterdam and/or the admission to listing on the FCA’s
Official List and to trading on the London Stock Exchange’s Main Market of the New Just Eat Takeaway.com Shares, in each case to the extent any Just Eat Takeaway.com Shares are then listed on such exchange;
|
“Prospectus Regulation”
|
means Regulation (EU) 2017/1129 of the European Parliament and Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market
and repealing Directive 2003/71/EC;
|
“Q1 2021”
|
means the three-month period ended 31 March 2021;
|
“Record Date”
|
means 9 September 2020, after processing of all settlements on that date;
|
“Relationship Agreement”
|
means the agreement described at paragraph 9(b) of Part VIII (Additional Information) of this document;
|
“Resolutions”
|
means the resolutions set out in the Convocation of Extraordinary General Meeting;
|
“SEC”
|
means the United States Securities and Exchange Commission;
|
“Securities Act”
|
means the United States Securities Act of 1933 (as amended);
|
“subsidiary” and “subsidiary undertaking”
|
have the meanings given to them in sections 1159 and 1162 (respectively) of the Companies Act 2006;
|
“Supervisory Board”
|
means the supervisory board of Just Eat Takeaway.com;
|
“Supervisory Director”
|
means a member of the Supervisory Board;
|
“Transaction”
|
means the all-share combination of the Company with Grubhub Inc. in accordance with the Merger Agreement;
|
“UK Admission”
|
means admission of the New Just Eat Takeaway.com Shares to listing on the FCA’s Official List and to trading on the London Stock Exchange’s Main Market;
|
“United Kingdom” or “UK”
|
means the United Kingdom of Great Britain and Northern Ireland;
|
“U.S.”
|
means the United States of America; and
|
“Voting and Support Agreement”
|
means the voting and support agreement dated 10 June 2020 and made between Jitse Groen and Grubhub.
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Revenues
|
$
|
1,007,257
|
$
|
683,067
|
$
|
493,331
|
||||||
Costs and expenses:
|
||||||||||||
Operations and support
|
454,321
|
269,453
|
171,756
|
|||||||||
Sales and marketing
|
214,290
|
150,730
|
110,323
|
|||||||||
Technology (exclusive of amortization)
|
82,278
|
56,263
|
42,454
|
|||||||||
General and administrative
|
85,465
|
65,023
|
50,482
|
|||||||||
Depreciation and amortization
|
85,940
|
51,848
|
35,193
|
|||||||||
Total costs and expenses
|
922,294
|
593,317
|
410,208
|
|||||||||
Income from operations
|
84,963
|
89,750
|
83,123
|
|||||||||
Interest (income) expense - net
|
3,530
|
102
|
(729
|
)
|
||||||||
Income before provision for income taxes
|
81,433
|
89,648
|
83,852
|
|||||||||
Income tax (benefit) expense
|
2,952
|
(9,335
|
)
|
34,295
|
||||||||
Net income attributable to common stockholders
|
$
|
78,481
|
$
|
98,983
|
$
|
49,557
|
||||||
Net income per share attributable to common stockholders:
|
||||||||||||
Basic
|
$
|
0.88
|
$
|
1.15
|
$
|
0.58
|
||||||
Diluted
|
$
|
0.85
|
$
|
1.12
|
$
|
0.58
|
||||||
Weighted-average shares used to compute net income per share attributable to common stockholders:
|
||||||||||||
Basic
|
89,447
|
86,297
|
85,069
|
|||||||||
Diluted
|
92,354
|
88,182
|
86,135
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Net income
|
$
|
78,481
|
$
|
98,983
|
$
|
49,557
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Foreign currency translation adjustments
|
(663
|
)
|
850
|
(1,474
|
)
|
|||||||
COMPREHENSIVE INCOME
|
$
|
77,818
|
$
|
99,833
|
$
|
48,083
|
December 31,
2018
|
December 31,
2017
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
211,245
|
$
|
234,090
|
||||
Short-term investments
|
14,084
|
23,605
|
||||||
Accounts receivable, less allowances for doubtful accounts
|
110,855
|
87,377
|
||||||
Income tax receivable
|
9,949
|
8,593
|
||||||
Prepaid expenses and other current assets
|
17,642
|
6,818
|
||||||
Total current assets
|
363,775
|
360,483
|
||||||
PROPERTY AND EQUIPMENT:
|
||||||||
Property and equipment, net of depreciation and amortization
|
119,495
|
71,384
|
||||||
OTHER ASSETS:
|
||||||||
Other assets
|
14,186
|
6,487
|
||||||
Goodwill
|
1,019,239
|
589,862
|
||||||
Acquired intangible assets, net of amortization
|
549,013
|
515,553
|
||||||
Total other assets
|
1,582,438
|
1,111,902
|
||||||
TOTAL ASSETS
|
$
|
2,065,708
|
$
|
1,543,769
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Restaurant food liability
|
$
|
127,344
|
$
|
119,922
|
||||
Accounts payable
|
26,656
|
7,607
|
||||||
Accrued payroll
|
18,173
|
13,186
|
||||||
Taxes payable
|
422
|
3,109
|
||||||
Short-term debt
|
6,250
|
3,906
|
||||||
Other accruals
|
44,323
|
26,818
|
||||||
Total current liabilities
|
223,168
|
174,548
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Deferred taxes, non-current
|
46,383
|
74,292
|
||||||
Other accruals
|
18,270
|
7,468
|
||||||
Long-term debt
|
335,548
|
169,645
|
||||||
Total long-term liabilities
|
400,201
|
251,405
|
||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of December 31, 2018 and December 31, 2017; issued and outstanding: no shares as of December 31, 2018 and December 31, 2017.
|
—
|
—
|
||||||
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at December 31, 2018 and December 31, 2017; issued and outstanding: 90,756,548 and 86,790,624 shares as of December 31, 2018 and December 31,
2017, respectively
|
9
|
9
|
||||||
Accumulated other comprehensive loss
|
(1,891
|
)
|
(1,228
|
)
|
||||
Additional paid-in capital
|
1,094,866
|
849,043
|
||||||
Retained earnings
|
349,355
|
269,992
|
||||||
Total Stockholders’ Equity
|
$
|
1,442,339
|
$
|
1,117,816
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,065,708
|
$
|
1,543,769
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net income
|
$
|
78,481
|
$
|
98,983
|
$
|
49,557
|
||||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||||||
Depreciation
|
21,647
|
11,775
|
8,921
|
|||||||||
Bad debt expense
|
941
|
1,424
|
1,102
|
|||||||||
Deferred taxes
|
1,724
|
(31,179
|
)
|
1,027
|
||||||||
Amortization of intangible assets and developed software
|
64,293
|
40,073
|
26,272
|
|||||||||
Stock-based compensation
|
55,261
|
32,748
|
23,559
|
|||||||||
Deferred rent
|
4,974
|
849
|
1,286
|
|||||||||
Tenant allowance amortization
|
(837
|
)
|
(135
|
)
|
(159
|
)
|
||||||
Amortization of deferred loan costs
|
715
|
487
|
365
|
|||||||||
Other
|
(241
|
)
|
(168
|
)
|
(612
|
)
|
||||||
Change in assets and liabilities, net of the effects of business acquisitions:
|
||||||||||||
Accounts receivable
|
(6,092
|
)
|
(26,236
|
)
|
(12,027
|
)
|
||||||
Income taxes receivable
|
(1,356
|
)
|
(1,597
|
)
|
(5,461
|
)
|
||||||
Prepaid expenses and other assets
|
(16,270
|
)
|
5,516
|
(8,663
|
)
|
|||||||
Restaurant food liability
|
2,921
|
8,576
|
16,451
|
|||||||||
Accounts payable
|
11,160
|
(4,244
|
)
|
(3,204
|
)
|
|||||||
Accrued payroll
|
3,621
|
5,537
|
1,819
|
|||||||||
Other accruals
|
4,585
|
11,735
|
(2,453
|
)
|
||||||||
Net cash provided by operating activities
|
225,527
|
154,144
|
97,780
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Acquisitions of businesses, net of cash acquired
|
(517,909
|
)
|
(333,301
|
)
|
(65,849
|
)
|
||||||
Purchases of investments
|
(57,197
|
)
|
(154,758
|
)
|
(226,694
|
)
|
||||||
Proceeds from maturity of investments
|
67,166
|
215,983
|
284,662
|
|||||||||
Capitalized website and development costs
|
(31,180
|
)
|
(21,325
|
)
|
(12,809
|
)
|
||||||
Purchases of property and equipment
|
(43,033
|
)
|
(18,971
|
)
|
(24,087
|
)
|
||||||
Acquisition of other intangible assets
|
(11,851
|
)
|
(25,147
|
)
|
(250
|
)
|
||||||
Other cash flows from investing activities
|
—
|
557
|
(492
|
)
|
||||||||
Net cash used in investing activities
|
(594,004
|
)
|
(336,962
|
)
|
(45,519
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds from the issuance of common stock
|
200,000
|
—
|
—
|
|||||||||
Proceeds from borrowings under the credit facility
|
222,000
|
200,000
|
—
|
|||||||||
Repayments of borrowings under the credit facility
|
(53,906
|
)
|
(25,781
|
)
|
—
|
|||||||
Repurchases of Common Stock
|
—
|
—
|
(14,774
|
)
|
||||||||
Proceeds from exercise of stock options
|
14,190
|
16,375
|
13,468
|
|||||||||
Excess tax benefits related to stock-based compensation
|
—
|
—
|
24,906
|
|||||||||
Taxes paid related to net settlement of stock-based compensation awards
|
(35,599
|
)
|
(10,556
|
)
|
(2,779
|
)
|
||||||
Payments for debt issuance costs
|
—
|
(1,979
|
)
|
(1,477
|
)
|
|||||||
Net cash provided by financing activities
|
346,685
|
178,059
|
19,344
|
|||||||||
Net change in cash, cash equivalents, and restricted cash
|
(21,792
|
)
|
(4,759
|
)
|
71,605
|
|||||||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(645
|
)
|
784
|
(1,394
|
)
|
|||||||
Cash, cash equivalents, and restricted cash at beginning of year
|
238,239
|
242,214
|
172,003
|
|||||||||
Cash, cash equivalents, and restricted cash at end of the year
|
$
|
215,802
|
$
|
238,239
|
$
|
242,214
|
||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
|
||||||||||||
Cash paid for income taxes
|
$
|
7,895
|
$
|
19,148
|
$
|
8,722
|
||||||
Capitalized property, equipment and website and development costs in accounts payable at period end
|
7,463
|
2,960
|
2,583
|
|||||||||
Net working capital adjustment receivable
|
127
|
737
|
—
|
|||||||||
Fair value of equity awards assumed on acquisition
|
2,966
|
274
|
—
|
|||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
||||||||||||
Cash and cash equivalents
|
$
|
211,245
|
$
|
234,090
|
$
|
239,528
|
||||||
Restricted cash included in prepaid expenses and other current assets
|
1,398
|
—
|
—
|
|||||||||
Restricted cash included in other assets
|
3,159
|
4,149
|
2,686
|
|||||||||
Total cash, cash equivalents, and restricted cash
|
$
|
215,802
|
$
|
238,239
|
$
|
242,214
|
Common stock |
Accumulated
Other Comprehensive
|
Retained |
Total
Stockholders'
|
|||||||||||||||||||||
Shares |
Amount |
APIC |
Income (Loss) |
Earnings |
Equity |
|||||||||||||||||||
Balance December 31, 2015
|
84,979,869
|
$
|
8
|
$
|
759,292
|
$
|
(604
|
)
|
$
|
118,900
|
$
|
877,596
|
||||||||||||
Net income
|
—
|
—
|
—
|
—
|
49,557
|
49,557
|
||||||||||||||||||
Currency translation
|
—
|
—
|
—
|
(1,474
|
)
|
—
|
(1,474
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
—
|
25,619
|
—
|
—
|
25,619
|
||||||||||||||||||
Tax benefit related to stock-based compensation
|
—
|
—
|
24,906
|
—
|
—
|
24,906
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,523,952
|
1
|
13,467
|
—
|
—
|
13,468
|
||||||||||||||||||
Repurchases of common stock
|
(724,473
|
)
|
—
|
(14,774
|
)
|
—
|
—
|
(14,774
|
)
|
|||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(87,015
|
)
|
—
|
(2,779
|
)
|
—
|
—
|
(2,779
|
)
|
|||||||||||||||
Balance at December 31, 2016
|
85,692,333
|
9
|
805,731
|
(2,078
|
)
|
168,457
|
972,119
|
|||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
98,983
|
98,983
|
||||||||||||||||||
Cumulative effect adjustment upon adoption of ASU 2016-09
|
—
|
—
|
—
|
—
|
2,552
|
2,552
|
||||||||||||||||||
Currency translation
|
—
|
—
|
—
|
850
|
—
|
850
|
||||||||||||||||||
Stock-based compensation
|
—
|
—
|
37,219
|
—
|
—
|
37,219
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,331,083
|
—
|
16,375
|
—
|
—
|
16,375
|
||||||||||||||||||
Issuance of common stock, acquisitions
|
—
|
—
|
274
|
—
|
—
|
274
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(232,792
|
)
|
—
|
(10,556
|
)
|
—
|
—
|
(10,556
|
)
|
|||||||||||||||
Balance at December 31, 2017
|
86,790,624
|
9
|
849,043
|
(1,228
|
)
|
269,992
|
1,117,816
|
|||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
78,481
|
78,481
|
||||||||||||||||||
Cumulative effect adjustment upon adoption of ASU 2014-09
|
—
|
—
|
—
|
—
|
882
|
882
|
||||||||||||||||||
Currency translation
|
—
|
—
|
—
|
(663
|
)
|
—
|
(663
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
—
|
64,266
|
—
|
—
|
64,266
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,512,426
|
—
|
14,190
|
—
|
—
|
14,190
|
||||||||||||||||||
Issuance of common stock, investments
|
2,820,464
|
—
|
200,000
|
—
|
—
|
200,000
|
||||||||||||||||||
Issuance of common stock, acquisitions
|
—
|
—
|
2,966
|
—
|
—
|
2,966
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(366,966
|
)
|
—
|
(35,599
|
)
|
—
|
—
|
(35,599
|
)
|
|||||||||||||||
Balance at December 31, 2018
|
90,756,548
|
$
|
9
|
$
|
1,094,866
|
$
|
(1,891
|
)
|
$
|
349,355
|
$
|
1,442,339
|
1. |
Organization
|
2. |
Summary of Significant Accounting Policies
|
Estimated Useful Life
|
||
Computer equipment
|
2-3 years
|
|
Furniture and fixtures
|
5 years
|
|
Developed software
|
1-3 years
|
|
Purchased software and digital assets
|
3-5 years
|
|
Leasehold improvements
|
Shorter of expected useful life or lease term
|
●
|
Risk-free rate. Risk-free interest rates are derived from U.S. Treasury securities as of the option grant date.
|
|
●
|
Expected dividend yields. Expected dividend yields are based on our historical dividend payments, which have been zero to date (excluding the
preferred stock tax distributions made by Seamless Holdings prior to 2015).
|
|
●
|
Volatility. Beginning in the first quarter of 2018, expected volatility is based on the historical and implied volatilities of the Company’s own
common stock. Prior to 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical volatility of our common stock due to our
limited trading history as there was no active external or internal market for our common stock prior to the Company’s initial public offering in April 2014.
|
|
●
|
Expected term. Beginning in the first quarter of 2017, the expected term calculation for option awards considers a combination of the Company’s
historical and estimated future exercise behavior. Prior to 2017, the Company applied a simplified method which estimated the weighted-average expected life of the options as the average of the vesting option schedule and the term of the
award due to insufficient historical exercise data as a result of the limited period of time stock-based awards had been exercisable.
|
|
●
|
Forfeiture rate. Forfeiture rates are estimated using historical actual forfeiture trends as well as our judgment of future forfeitures. These
rates are evaluated at least annually and any change in compensation expense is recognized in the period of the change. The estimation of stock awards that will ultimately vest requires judgment and, to the extent actual results or updated
estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period in which the estimates are revised. The Company considers many factors when estimating expected forfeitures, including the
types of awards and employee class. Actual results, and future changes in estimates, may differ substantially from management’s current estimates.
|
●
|
Beginning in January 1, 2018, the Company defers the incremental costs of obtaining contracts as contract acquisition assets resulting in a net decrease of $9.0 million in sales and
marketing expense in the consolidated statements of operations for the year ended December 31, 2018 and corresponding increase in other assets on the consolidated balance sheets. Contract acquisition assets are amortized to sales and
marketing expense in the consolidated statements of operations over the period in which services are expected to be provided to the customer, which is estimated to be approximately 4 years. Prior to the adoption of ASC Topic 606, the cost
of obtaining a contract was recognized as it was incurred.
|
●
|
Beginning in the first quarter of 2018, the Company recognizes revenue from estimated unredeemed gift cards that are not subject to unclaimed property laws over the expected customer
redemption period, rather than when the likelihood of redemption became remote. The Company recorded a cumulative-effect adjustment to opening retained earnings as of January 1, 2018 of $0.9 million related to unredeemed gift cards,
breakage income of $1.1 million in revenues in the consolidated statements of operations during the year ended December 31, 2018 and a corresponding decrease in other accruals of $2.0 million on the consolidated balance sheets.
|
|
●
|
Changes in the timing of revenue recognition under ASC Topic 606 related to incentives, refunds and adjustments resulted in a $0.1 million increase in revenues in the consolidated
statements of operations during the year ended December 31, 2018.
|
|
●
|
The adoption of ASC Topic 606 had no impact to the Company’s total net cash provided by or used in operations, investing or financing activities within the Company’s consolidated statement
of cash flows for the year ended December 31, 2018.
|
3. |
Revenue
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Balance at beginning of period
|
$
|
1,513
|
$
|
1,229
|
||||
Additions (reductions) to expense
|
(23
|
)
|
335
|
|||||
Write-offs, net of recoveries and other adjustments
|
(30
|
)
|
(51
|
)
|
||||
Balance at end of period
|
$
|
1,460
|
$
|
1,513
|
4. |
Acquisitions
|
Tapingo
|
LevelUp
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Accounts receivable
|
$
|
3,101
|
$
|
6,201
|
$
|
9,302
|
||||||
Prepaid expenses and other current assets
|
843
|
1,396
|
2,239
|
|||||||||
Property and equipment
|
—
|
895
|
895
|
|||||||||
Other assets
|
163
|
—
|
163
|
|||||||||
Restaurant relationships
|
11,279
|
10,217
|
21,496
|
|||||||||
Diner acquisition
|
—
|
3,912
|
3,912
|
|||||||||
Below-market lease intangible
|
—
|
2,205
|
2,205
|
|||||||||
Developed technology
|
9,755
|
20,107
|
29,862
|
|||||||||
Goodwill
|
133,383
|
295,994
|
429,377
|
|||||||||
Net deferred tax asset
|
(1,988
|
)
|
31,621
|
29,633
|
||||||||
Accounts payable and accrued expenses
|
(4,478
|
)
|
(3,121
|
)
|
(7,599
|
)
|
||||||
Total purchase price net of cash acquired
|
$
|
152,058
|
$
|
369,427
|
$
|
521,485
|
||||||
Net working capital adjustment receivable
|
127
|
—
|
127
|
|||||||||
Fair value of assumed ISOs attributable to pre-combination service
|
(372
|
)
|
(2,594
|
)
|
(2,966
|
)
|
||||||
Net cash paid
|
$
|
151,813
|
$
|
366,833
|
$
|
518,646
|
Eat24
|
Foodler
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Accounts receivable
|
$
|
8,267
|
$
|
307
|
$
|
8,574
|
||||||
Prepaid expenses and other current assets
|
221
|
—
|
221
|
|||||||||
Property and equipment
|
1,113
|
—
|
1,113
|
|||||||||
Restaurant relationships
|
126,232
|
35,217
|
161,449
|
|||||||||
Diner acquisition
|
35,226
|
1,354
|
36,580
|
|||||||||
Trademarks
|
2,225
|
74
|
2,299
|
|||||||||
Developed technology
|
2,559
|
1,955
|
4,514
|
|||||||||
Goodwill
|
135,955
|
17,452
|
153,407
|
|||||||||
Accounts payable and accrued expenses
|
(30,082
|
)
|
(5,237
|
)
|
(35,319
|
)
|
||||||
Total purchase price net of cash acquired
|
$
|
281,716
|
$
|
51,122
|
$
|
332,838
|
||||||
Fair value of replacement RSUs attributable to pre-combination service
|
(274
|
)
|
—
|
(274
|
)
|
|||||||
Net cash paid
|
$
|
281,442
|
$
|
51,122
|
$
|
332,564
|
(in thousands)
|
||||
Accounts receivable
|
$
|
2,320
|
||
Prepaid expenses and other assets
|
68
|
|||
Restaurant relationships
|
46,513
|
|||
Property and equipment
|
257
|
|||
Developed technology
|
1,731
|
|||
Goodwill
|
40,235
|
|||
Trademarks
|
440
|
|||
Accounts payable and accrued expenses
|
(6,303
|
)
|
||
Net deferred tax liability
|
(19,412
|
)
|
||
Total purchase price net of cash acquired
|
$
|
65,849
|
Valuation Method
|
|||||||
Tapingo
|
LevelUp
|
Eat24
|
Foodler
|
||||
Restaurant relationships
|
Multi-period excess earnings
|
With or without comparative business valuation
|
Multi-period excess earnings
|
Multi-period excess earnings
|
|||
Diner acquisition
|
n/a
|
Cost to recreate
|
Cost to recreate
|
Cost to recreate
|
|||
Developed technology
|
Cost to recreate
|
Multi-period excess earnings
|
Cost to recreate
|
Cost to recreate
|
|||
Trademark
|
n/a
|
n/a
|
Relief from royalty
|
Relief from royalty
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands,
except per share data)
(unaudited)
|
||||||||
Revenues
|
$
|
1,041,811
|
$
|
782,895
|
||||
Net income
|
55,975
|
41,008
|
||||||
Net income per share attributable to common shareholders:
|
||||||||
Basic
|
$
|
0.63
|
$
|
0.48
|
||||
Diluted
|
$
|
0.61
|
$
|
0.46
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
(unaudited)
|
||||||||
Depreciation and amortization
|
$
|
4,893
|
$
|
16,588
|
||||
Transaction costs
|
(6,923
|
)
|
1,293
|
|||||
Stock-based compensation
|
3,748
|
7,200
|
||||||
Interest expense
|
1,601
|
5,358
|
||||||
Other
|
—
|
4,690
|
||||||
Income tax benefit
|
(1,548
|
)
|
(15,098
|
)
|
5. |
Marketable Securities
|
December 31, 2018
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value
|
|||||||||||||
|
(in thousands) |
|||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
12,097
|
$
|
—
|
$
|
(21
|
)
|
$
|
12,076
|
|||||||
Corporate bonds
|
870
|
—
|
—
|
870
|
||||||||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
13,334
|
—
|
(88
|
)
|
13,246
|
|||||||||||
Corporate bonds
|
750
|
—
|
—
|
750
|
||||||||||||
Total
|
$
|
27,051
|
$
|
—
|
$
|
(109
|
)
|
$
|
26,942
|
December 31, 2017
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value
|
|||||||||||||
(in thousands) |
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
39,979
|
$
|
—
|
$
|
(43
|
)
|
$
|
39,936
|
|||||||
Corporate bonds
|
1,250
|
—
|
—
|
1,250
|
||||||||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
21,480
|
—
|
(99
|
)
|
21,381
|
|||||||||||
Corporate bonds
|
2,125
|
—
|
(1
|
)
|
2,124
|
|||||||||||
Total
|
$
|
64,834
|
$
|
—
|
$
|
(143
|
)
|
$
|
64,691
|
December 31, 2018
|
|||||||||||||||||||||||
Less Than 12 Months |
12 Months or Greater |
Total |
|||||||||||||||||||||
Estimated
Fair Value
|
Unrealized
Loss
|
Estimated
Fair Value
|
Unrealized Loss |
Estimated
Fair Value
|
Unrealized Loss |
||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Commercial paper
|
$
|
25,322
|
$
|
(109
|
)
|
$
|
—
|
$
|
—
|
$
|
25,322
|
$
|
(109
|
)
|
|||||||||
Corporate bonds
|
750
|
—
|
—
|
—
|
750
|
—
|
|||||||||||||||||
Total
|
$
|
26,072
|
$
|
(109
|
)
|
$
|
—
|
$
|
—
|
$
|
26,072
|
$
|
(109
|
)
|
December 31, 2017
|
|||||||||||||||||||||||
Less Than 12 Months
|
12 Months or Greater
|
Total |
|||||||||||||||||||||
Estimated
Fair Value
|
Unrealized
Loss
|
Estimated
Fair Value
|
Unrealized Loss |
Estimated
Fair Value
|
Unrealized
Loss
|
||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||
Commercial paper
|
$
|
61,317
|
$
|
(142
|
)
|
$
|
—
|
$
|
—
|
$
|
61,317
|
$
|
(142
|
)
|
|||||||||
Corporate bonds
|
3,374
|
(1
|
)
|
—
|
—
|
3,374
|
(1
|
)
|
|||||||||||||||
Total
|
$
|
64,691
|
$
|
(143
|
)
|
$
|
—
|
$
|
—
|
$
|
64,691
|
$
|
(143
|
)
|
6. |
Goodwill and Acquired Intangible Assets
|
December 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Value
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Value
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Restaurant relationships
|
$
|
494,278
|
$
|
(103,457
|
)
|
$
|
390,821
|
$
|
457,580
|
$
|
(76,852
|
)
|
$
|
380,728
|
||||||||||
Diner acquisition
|
47,541
|
(10,306
|
)
|
37,235
|
40,247
|
(1,906
|
)
|
38,341
|
||||||||||||||||
Developed technology
|
38,385
|
(10,247
|
)
|
28,138
|
8,523
|
(6,418
|
)
|
2,105
|
||||||||||||||||
Trademarks
|
2,225
|
(2,225
|
)
|
—
|
2,225
|
(402
|
)
|
1,823
|
||||||||||||||||
Below-market lease intangible
|
2,206
|
(124
|
)
|
2,082
|
—
|
—
|
—
|
|||||||||||||||||
Other
|
3,676
|
(2,615
|
)
|
1,061
|
6,888
|
(4,008
|
)
|
2,880
|
||||||||||||||||
Total amortizable intangible assets
|
588,311
|
(128,974
|
)
|
459,337
|
515,463
|
(89,586
|
)
|
425,877
|
||||||||||||||||
Indefinite-lived trademarks
|
89,676
|
—
|
89,676
|
89,676
|
—
|
89,676
|
||||||||||||||||||
Total acquired intangible assets
|
$
|
677,987
|
$
|
(128,974
|
)
|
$
|
549,013
|
$
|
605,139
|
$
|
(89,586
|
)
|
$
|
515,553
|
Goodwill
|
Accumulated
Impairment
Losses
|
Net
Book
Value
|
||||||||||
(in thousands)
|
||||||||||||
Balance as of December 31, 2016
|
$
|
436,455
|
$
|
—
|
$
|
436,455
|
||||||
Acquisitions
|
153,407
|
—
|
153,407
|
|||||||||
Balance as of December 31, 2017
|
$
|
589,862
|
$
|
—
|
$
|
589,862
|
||||||
Acquisitions
|
429,377
|
—
|
429,377
|
|||||||||
Balance as of December 31, 2018
|
$
|
1,019,239
|
$
|
—
|
$
|
1,019,239
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
|||||||||||||||
Amount
|
Weighted-
Average
Amortization
Period
|
Amount
|
Weighted-
Average
Amortization
Period
|
|||||||||||||
(in thousands)
|
(years)
|
(in thousands)
|
(years)
|
|||||||||||||
Restaurant relationships
|
$
|
36,697
|
17.5
|
$
|
177,929
|
19.3
|
||||||||||
Developed technology
|
29,862
|
4.7
|
4,514
|
0.5
|
||||||||||||
Diner acquisition
|
7,294
|
5.0
|
40,247
|
5.0
|
||||||||||||
Below-market lease intangible
|
2,205
|
5.8
|
—
|
|||||||||||||
Trademarks
|
—
|
2,299
|
1.2
|
|||||||||||||
Other
|
—
|
5,000
|
2.8
|
|||||||||||||
Total
|
$
|
76,058
|
$
|
229,989
|
(in thousands)
|
||||
2019
|
$
|
47,445
|
||
2020
|
44,770
|
|||
2021
|
39,120
|
|||
2022
|
37,150
|
|||
2023
|
30,644
|
|||
Thereafter
|
260,208
|
|||
Total
|
$
|
459,337
|
7. |
Property and Equipment
|
December 31,
2018
|
December 31,
2017
|
|||||||
(in thousands)
|
||||||||
Developed software
|
$
|
90,302
|
$
|
52,041
|
||||
Computer equipment
|
50,767
|
31,601
|
||||||
Leasehold improvements
|
39,550
|
23,400
|
||||||
Furniture and fixtures
|
10,801
|
6,857
|
||||||
Purchased software and digital assets
|
4,696
|
2,881
|
||||||
Construction in progress
|
1,976
|
—
|
||||||
Property and equipment
|
198,092
|
116,780
|
||||||
Accumulated depreciation and amortization
|
(78,597
|
)
|
(45,396
|
)
|
||||
Property and equipment, net
|
$
|
119,495
|
$
|
71,384
|
8. |
Commitments and Contingencies
|
(in thousands)
|
||||
2019
|
$
|
13,009
|
||
2020
|
14,874
|
|||
2021
|
14,243
|
|||
2022
|
12,219
|
|||
2023
|
12,220
|
|||
Thereafter
|
57,503
|
|||
Total
|
$
|
124,068
|
9. |
Debt
|
December 31,
2018
|
December 31,
2017
|
|||||||
(in thousands)
|
||||||||
Term loan
|
$
|
120,312
|
$
|
124,219
|
||||
Revolving loan
|
222,000
|
50,000
|
||||||
Total debt
|
$
|
342,312
|
$
|
174,219
|
||||
Less current portion
|
(6,250
|
)
|
(3,906
|
)
|
||||
Less unamortized deferred debt issuance costs
|
(514
|
)
|
(668
|
)
|
||||
Long-term debt
|
$
|
335,548
|
$
|
169,645
|
(in thousands)
|
||||
2019
|
$
|
6,250
|
||
2020
|
6,250
|
|||
2021
|
7,031
|
|||
2022
|
322,781
|
|||
Total
|
$
|
342,312
|
10. |
Stock-Based Compensation
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Weighted-average fair value options granted
|
$
|
66.19
|
$
|
15.19
|
$
|
12.59
|
||||||
Average risk-free interest rate
|
2.61
|
%
|
1.65
|
%
|
1.41
|
%
|
||||||
Expected stock price volatility (a)
|
46.4
|
%
|
48.7
|
%
|
49.7
|
%
|
||||||
Dividend yield | None |
None |
None |
|||||||||
Expected stock option life (years) (b)
|
3.51
|
4.00
|
5.84
|
(a)
|
Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical
volatility of the Company’s own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.
|
(b)
|
The expected term for Tapingo and LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date. During the year ended December 31, 2016, the expected
term of option awards was estimated using a simplified method due to the limited period of time stock-based awards had been exercisable.
|
Options
|
Weighted-
Average
Exercise Price
|
Aggregate
Intrinsic Value (thousands)
|
Weighted-
Average
Exercise Term
(years)
|
|||||||||||||
Outstanding at December 31, 2017
|
2,705,849
|
$
|
25.53
|
$
|
125,197
|
7.28
|
||||||||||
Granted
|
675,643
|
62.89
|
||||||||||||||
Forfeited
|
(206,986
|
)
|
46.27
|
|||||||||||||
Exercised
|
(523,667
|
)
|
27.10
|
|||||||||||||
Outstanding at December 31, 2018
|
2,650,839
|
33.13
|
120,977
|
6.87
|
||||||||||||
Vested and expected to vest at December 31, 2018
|
2,649,081
|
33.11
|
120,926
|
6.87
|
||||||||||||
Exercisable at December 31, 2018
|
1,599,731
|
$
|
22.91
|
$
|
86,880
|
6.03
|
Restricted Stock Units
|
||||||||
Shares
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Outstanding at December 31, 2017
|
2,454,801
|
$
|
37.56
|
|||||
Granted
|
1,325,499
|
94.41
|
||||||
Forfeited
|
(462,684
|
)
|
52.72
|
|||||
Vested
|
(988,759
|
)
|
36.55
|
|||||
Outstanding at December 31, 2018
|
2,328,857
|
$
|
67.33
|
11. |
Income Taxes
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
(2,934
|
)
|
$
|
16,852
|
$
|
24,509
|
|||||
State
|
3,827
|
4,721
|
8,132
|
|||||||||
Foreign
|
335
|
271
|
338
|
|||||||||
Total current
|
1,228
|
21,844
|
32,979
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
2,608
|
(30,794
|
)
|
800
|
||||||||
State
|
(884
|
)
|
(385
|
)
|
516
|
|||||||
Total deferred
|
1,724
|
(31,179
|
)
|
1,316
|
||||||||
Total income tax (benefit) expense
|
$
|
2,952
|
$
|
(9,335
|
)
|
$
|
34,295
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Domestic source
|
$
|
80,878
|
$
|
88,357
|
$
|
82,033
|
||||||
Foreign source
|
555
|
1,291
|
1,819
|
|||||||||
Income before provision for income taxes
|
$
|
81,433
|
$
|
89,648
|
$
|
83,852
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Income tax expense at statutory rate
|
$
|
17,101
|
$
|
31,377
|
$
|
29,348
|
||||||
State income taxes
|
1,248
|
5,011
|
5,621
|
|||||||||
Effect of federal rate change
|
—
|
(36,768
|
)
|
—
|
||||||||
Stock-based compensation
|
(15,924
|
)
|
(7,072
|
)
|
—
|
|||||||
Excess compensation
|
1,753
|
—
|
—
|
|||||||||
Research and development tax credit
|
(1,470
|
)
|
(800
|
)
|
(638
|
)
|
||||||
Uncertain tax position
|
(545
|
)
|
(55
|
)
|
—
|
|||||||
Foreign rate differential
|
(57
|
)
|
(203
|
)
|
(273
|
)
|
||||||
Unremitted earnings tax
|
—
|
363
|
—
|
|||||||||
All other
|
846
|
(1,188
|
)
|
237
|
||||||||
Total income tax (benefit) expense
|
$
|
2,952
|
$
|
(9,335
|
)
|
$
|
34,295
|
As of December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Loss and credit carryforwards
|
$
|
72,466
|
$
|
11,184
|
||||
Accrued expenses
|
4,128
|
2,089
|
||||||
Stock-based compensation
|
8,832
|
9,914
|
||||||
Fixed assets - state
|
2,295
|
—
|
||||||
Total deferred tax assets
|
87,721
|
23,187
|
||||||
Valuation allowance
|
(23,840
|
)
|
(4,803
|
)
|
||||
Net deferred tax assets
|
63,881
|
18,384
|
||||||
Deferred tax liabilities:
|
||||||||
Fixed assets
|
(8,607
|
)
|
(5,909
|
)
|
||||
Intangible assets
|
(101,451
|
)
|
(86,462
|
)
|
||||
Prepaid expenses
|
(206
|
)
|
(305
|
)
|
||||
Total deferred tax liabilities
|
(110,264
|
)
|
(92,676
|
)
|
||||
Net deferred tax liability
|
$
|
(46,383
|
)
|
$
|
(74,292
|
)
|
2018
|
2017
|
Beginning
Year of
Expiration |
||||||||||
(in thousands)
|
||||||||||||
U.S. federal loss carryforwards
|
$
|
29,853
|
$
|
595
|
2027
|
|||||||
U.S. state and local loss carryforwards
|
18,147
|
4,362
|
2027
|
|||||||||
Israeli loss carryforward
|
15,382
|
—
|
Indefinite
|
|||||||||
Illinois Edge Credits (a)
|
11,992
|
8,422
|
2018
|
|||||||||
Federal research and development credit
|
1,986
|
—
|
2028
|
|||||||||
State research and development credit
|
1,710
|
—
|
2018
|
(a)
|
Amounts are before the federal benefit of state tax.
|
As of December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Balance at beginning of period
|
$
|
2,864
|
$
|
3,345
|
||||
Reductions for tax positions taken in prior years
|
(2,260
|
)
|
(937
|
)
|
||||
Additions for tax positions taken in the current year
|
147
|
456
|
||||||
Balance at end of period
|
$
|
751
|
$
|
2,864
|
12. |
Stockholders’ Equity
|
13. |
Retirement Plan
|
14. |
Earnings Per Share Attributable to Common Stockholders
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands, except per share data)
|
||||||||||||
Basic earnings per share:
|
||||||||||||
Net income attributable to common stockholders (numerator)
|
$
|
78,481
|
$
|
98,983
|
$
|
49,557
|
||||||
Shares used in computation (denominator)
|
||||||||||||
Weighted-average common shares outstanding
|
89,447
|
86,297
|
85,069
|
|||||||||
Basic earnings per share
|
$
|
0.88
|
$
|
1.15
|
$
|
0.58
|
||||||
Diluted earnings per share:
|
||||||||||||
Net income attributable to common stockholders (numerator)
|
$
|
78,481
|
$
|
98,983
|
$
|
49,557
|
||||||
Shares used in computation (denominator)
|
||||||||||||
Weighted-average common shares outstanding
|
89,447
|
86,297
|
85,069
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
1,601
|
1,059
|
792
|
|||||||||
Restricted stock units and restricted stock awards
|
1,306
|
826
|
274
|
|||||||||
Weighted-average diluted shares
|
92,354
|
88,182
|
86,135
|
(a) | ||||||||
Diluted earnings per share
|
$
|
0.85
|
$
|
1.12
|
$
|
0.58
|
(a)
|
Prior to the adoption of ASU 2016-09, the treasury stock method calculation of weighted-average dilutive shares outstanding for the year ended December 31, 2016 included the estimated impact of tax benefits
and deficiencies.
|
Year Ended December 31, | ||||||||||||
2018
|
2017
|
2016
|
||||||||||
Anti-dilutive shares underlying stock-based awards:
|
||||||||||||
Stock options
|
216,451
|
—
|
552,108
|
|||||||||
Restricted stock units
|
222,984
|
35,646
|
212,170
|
15. |
Fair Value Measurement
|
●
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
|
●
|
Level 2
|
Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.
|
|
●
|
Level 3
|
Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk
premiums that a market participant would require.
|
December 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
Level 2
|
Level 3
|
Carrying
Value
|
Level 2
|
Level 3
|
Carrying
Value
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Money market funds
|
$
|
61
|
$
|
—
|
$
|
61
|
$
|
93
|
$
|
—
|
$
|
93
|
||||||||||||
Commercial paper
|
25,322
|
—
|
25,431
|
61,317
|
—
|
61,459
|
||||||||||||||||||
Corporate bonds
|
1,620
|
—
|
1,620
|
3,374
|
—
|
3,375
|
||||||||||||||||||
Total assets
|
$
|
27,003
|
$
|
—
|
$
|
27,112
|
$
|
64,784
|
$
|
—
|
$
|
64,927
|
||||||||||||
Liabilities
|
||||||||||||||||||||||||
Long-term debt, including current maturities
|
$
|
—
|
$
|
342,745
|
$
|
342,312
|
$
|
—
|
$
|
175,700
|
$
|
174,219
|
||||||||||||
Total liabilities
|
$
|
—
|
$
|
342,745
|
$
|
342,312
|
$
|
—
|
$
|
175,700
|
$
|
174,219
|
16. |
Subsequent Events
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenues
|
$
|
1,312,151
|
$
|
1,007,257
|
$
|
683,067
|
||||||
Costs and expenses:
|
||||||||||||
Operations and support
|
675,471
|
454,321
|
269,453
|
|||||||||
Sales and marketing
|
310,299
|
214,290
|
150,730
|
|||||||||
Technology (exclusive of amortization)
|
115,297
|
82,278
|
56,263
|
|||||||||
General and administrative
|
101,918
|
85,465
|
65,023
|
|||||||||
Depreciation and amortization
|
115,449
|
85,940
|
51,848
|
|||||||||
Total costs and expenses
|
1,318,434
|
922,294
|
593,317
|
|||||||||
Income (loss) from operations
|
(6,283
|
)
|
84,963
|
89,750
|
||||||||
Interest expense - net
|
20,493
|
3,530
|
102
|
|||||||||
Income (loss) before provision for income taxes
|
(26,776
|
)
|
81,433
|
89,648
|
||||||||
Income tax (benefit) expense
|
(8,210
|
)
|
2,952
|
(9,335
|
)
|
|||||||
Net income (loss) attributable to common stockholders
|
$
|
(18,566
|
)
|
$
|
78,481
|
$
|
98,983
|
|||||
Net income (loss) per share attributable to common stockholders:
|
||||||||||||
Basic
|
$
|
(0.20
|
)
|
$
|
0.88
|
$
|
1.15
|
|||||
Diluted
|
$
|
(0.20
|
)
|
$
|
0.85
|
$
|
1.12
|
|||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
|
||||||||||||
Basic
|
91,247
|
89,447
|
86,297
|
|||||||||
Diluted
|
91,247
|
92,354
|
88,182
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net income (loss)
|
$
|
(18,566
|
)
|
$
|
78,481
|
$
|
98,983
|
|||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Foreign currency translation adjustments
|
263
|
(663
|
)
|
850
|
||||||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
(18,303
|
)
|
$
|
77,818
|
$
|
99,833
|
December 31,
2019
|
December 31,
2018 |
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
375,909
|
$
|
211,245
|
||||
Short-term investments
|
49,275
|
14,084
|
||||||
Accounts receivable, less allowances for doubtful accounts
|
119,658
|
110,855
|
||||||
Income tax receivable
|
3,960
|
9,949
|
||||||
Prepaid expenses and other current assets
|
17,515
|
17,642
|
||||||
Total current assets
|
566,317
|
363,775
|
||||||
PROPERTY AND EQUIPMENT:
|
||||||||
Property and equipment, net of depreciation and amortization
|
172,744
|
119,495
|
||||||
OTHER ASSETS:
|
||||||||
Other assets
|
26,836
|
14,186
|
||||||
Operating lease right-of-use asset
|
100,632
|
—
|
||||||
Goodwill
|
1,007,968
|
1,019,239
|
||||||
Acquired intangible assets, net of amortization
|
500,481
|
549,013
|
||||||
Total other assets
|
1,635,917
|
1,582,438
|
||||||
TOTAL ASSETS
|
$
|
2,374,978
|
$
|
2,065,708
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Restaurant food liability
|
$
|
131,753
|
$
|
127,344
|
||||
Accounts payable
|
26,748
|
26,656
|
||||||
Accrued payroll
|
19,982
|
18,173
|
||||||
Current portion of long-term debt
|
—
|
6,250
|
||||||
Current operating lease liability
|
9,376
|
—
|
||||||
Other accruals
|
61,504
|
44,745
|
||||||
Total current liabilities
|
249,363
|
223,168
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Deferred taxes, non-current
|
27,163
|
46,383
|
||||||
Noncurrent operating lease liability
|
111,056
|
—
|
||||||
Long-term debt
|
493,009
|
335,548
|
||||||
Other accruals
|
817
|
18,270
|
||||||
Total long-term liabilities
|
632,045
|
400,201
|
||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of December 31, 2019 and December 31, 2018; issued and outstanding: no shares as of December 31, 2019 and December 31, 2018.
|
—
|
—
|
||||||
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at December 31, 2019 and December 31, 2018; issued and outstanding: 91,576,060 and 90,756,548 shares as of December 31, 2019 and December 31,
2018, respectively
|
9
|
9
|
||||||
Accumulated other comprehensive loss
|
(1,628
|
)
|
(1,891
|
)
|
||||
Additional paid-in capital
|
1,164,400
|
1,094,866
|
||||||
Retained earnings
|
330,789
|
349,355
|
||||||
Total stockholders’ equity
|
$
|
1,493,570
|
$
|
1,442,339
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,374,978
|
$
|
2,065,708
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net income (loss)
|
$
|
(18,566
|
)
|
$
|
78,481
|
$
|
98,983
|
|||||
Adjustments to reconcile net income (loss) to net cash from operating activities:
|
||||||||||||
Depreciation
|
30,237
|
21,647
|
11,775
|
|||||||||
Amortization of intangible assets and developed software
|
85,212
|
64,293
|
40,073
|
|||||||||
Stock-based compensation
|
72,879
|
55,261
|
32,748
|
|||||||||
Deferred taxes
|
(7,726
|
)
|
1,724
|
(31,179
|
)
|
|||||||
Other
|
8,531
|
5,552
|
2,457
|
|||||||||
Change in assets and liabilities, net of the effects of business acquisitions:
|
||||||||||||
Accounts receivable
|
(11,591
|
)
|
(6,092
|
)
|
(26,236
|
)
|
||||||
Income taxes receivable
|
5,989
|
(1,356
|
)
|
(1,597
|
)
|
|||||||
Prepaid expenses and other assets
|
(13,854
|
)
|
(16,270
|
)
|
5,516
|
|||||||
Restaurant food liability
|
4,380
|
2,921
|
8,576
|
|||||||||
Accounts payable
|
1,978
|
11,160
|
(4,244
|
)
|
||||||||
Accrued payroll
|
1,804
|
3,621
|
5,537
|
|||||||||
Other accruals
|
23,349
|
4,585
|
11,735
|
|||||||||
Net cash provided by operating activities
|
182,622
|
225,527
|
154,144
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Purchases of investments
|
(85,989
|
)
|
(57,197
|
)
|
(154,758
|
)
|
||||||
Proceeds from maturity of investments
|
51,366
|
67,166
|
215,983
|
|||||||||
Capitalized website and development costs
|
(48,524
|
)
|
(31,180
|
)
|
(21,325
|
)
|
||||||
Purchases of property and equipment
|
(55,167
|
)
|
(43,033
|
)
|
(18,971
|
)
|
||||||
Acquisition of other intangible assets
|
(9,980
|
)
|
(11,851
|
)
|
(25,147
|
)
|
||||||
Acquisitions of businesses, net of cash acquired
|
127
|
(517,909
|
)
|
(333,301
|
)
|
|||||||
Other cash flows from investing activities
|
(250
|
)
|
—
|
557
|
||||||||
Net cash used in investing activities
|
(148,417
|
)
|
(594,004
|
)
|
(336,962
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds from the issuance of long-term debt
|
500,000
|
222,000
|
200,000
|
|||||||||
Repayments of borrowings under the credit facility
|
(342,313
|
)
|
(53,906
|
)
|
(25,781
|
)
|
||||||
Proceeds from the issuance of common stock
|
—
|
200,000
|
—
|
|||||||||
Taxes paid related to net settlement of stock-based compensation awards
|
(23,753
|
)
|
(35,599
|
)
|
(10,556
|
)
|
||||||
Proceeds from exercise of stock options
|
4,469
|
14,190
|
16,375
|
|||||||||
Payments for debt issuance costs
|
(9,136
|
)
|
—
|
(1,979
|
)
|
|||||||
Net cash provided by financing activities
|
129,267
|
346,685
|
178,059
|
|||||||||
Net change in cash, cash equivalents, and restricted cash
|
163,472
|
(21,792
|
)
|
(4,759
|
)
|
|||||||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
320
|
(645
|
)
|
784
|
||||||||
Cash, cash equivalents, and restricted cash at beginning of year
|
215,802
|
238,239
|
242,214
|
|||||||||
Cash, cash equivalents, and restricted cash at end of the period
|
$
|
379,594
|
$
|
215,802
|
$
|
238,239
|
||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
|
||||||||||||
Cash paid for income taxes
|
$
|
1,163
|
$
|
7,895
|
$
|
19,148
|
||||||
Capitalized property, equipment and website and development costs in accounts payable at period end
|
5,627
|
7,463
|
2,960
|
|||||||||
Net working capital adjustment receivable
|
—
|
127
|
737
|
|||||||||
Fair value of equity awards assumed on acquisition
|
—
|
2,966
|
274
|
|||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
||||||||||||
Cash and cash equivalents
|
$
|
375,909
|
$
|
211,245
|
$
|
234,090
|
||||||
Restricted cash included in prepaid expenses and other current assets
|
501
|
1,398
|
—
|
|||||||||
Restricted cash included in other assets
|
3,184
|
3,159
|
4,149
|
|||||||||
Total cash, cash equivalents, and restricted cash
|
$
|
379,594
|
$
|
215,802
|
$
|
238,239
|
Common stock
|
Accumulated
Other Comprehensive
|
Retained
|
Total
Stockholders'
|
|||||||||||||||||||||
Shares
|
Amount
|
APIC
|
Income (Loss)
|
Earnings
|
Equity
|
|||||||||||||||||||
Balance at December 31, 2016
|
85,692,333
|
$
|
9
|
$
|
805,731
|
$
|
(2,078
|
)
|
$
|
168,457
|
$
|
972,119
|
||||||||||||
Net income
|
—
|
—
|
—
|
—
|
98,983
|
98,983
|
||||||||||||||||||
Cumulative effect adjustment upon adoption of ASU 2016-09
|
—
|
—
|
—
|
—
|
2,552
|
2,552
|
||||||||||||||||||
Currency translation
|
—
|
—
|
—
|
850
|
—
|
850
|
||||||||||||||||||
Stock-based compensation
|
—
|
—
|
37,219
|
—
|
—
|
37,219
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,331,083
|
—
|
16,375
|
—
|
—
|
16,375
|
||||||||||||||||||
Issuance of common stock, acquisitions
|
—
|
—
|
274
|
—
|
—
|
274
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(232,792
|
)
|
—
|
(10,556
|
)
|
—
|
—
|
(10,556
|
)
|
|||||||||||||||
Balance at December 31, 2017 |
86,790,624
|
9
|
849,043
|
(1,228
|
)
|
269,992
|
1,117,816
|
|||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
78,481
|
78,481
|
||||||||||||||||||
Cumulative effect adjustment upon adoption of ASU 2014-09
|
—
|
—
|
—
|
—
|
882
|
882
|
||||||||||||||||||
Currency translation
|
—
|
—
|
—
|
(663
|
)
|
—
|
(663
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
—
|
64,266
|
—
|
—
|
64,266
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,512,426
|
—
|
14,190
|
—
|
—
|
14,190
|
||||||||||||||||||
Issuance of common stock, investments
|
2,820,464
|
—
|
200,000
|
—
|
—
|
200,000
|
||||||||||||||||||
Issuance of common stock, acquisitions
|
—
|
—
|
2,966
|
2,966
|
||||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(366,966
|
)
|
—
|
(35,599
|
)
|
—
|
—
|
(35,599
|
)
|
|||||||||||||||
Balance at December 31, 2018 |
90,756,548
|
9
|
1,094,866
|
(1,891
|
)
|
349,355
|
1,442,339
|
|||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(18,566
|
)
|
(18,566
|
)
|
||||||||||||||||
Currency translation
|
—
|
—
|
—
|
263
|
—
|
263
|
||||||||||||||||||
Stock-based compensation
|
—
|
—
|
88,818
|
—
|
—
|
88,818
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
1,174,002
|
—
|
4,469
|
—
|
—
|
4,469
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(354,490
|
)
|
—
|
(23,753
|
)
|
—
|
—
|
(23,753
|
)
|
|||||||||||||||
Balance at December 31, 2019
|
91,576,060
|
$
|
9
|
$
|
1,164,400
|
$
|
(1,628
|
)
|
$
|
330,789
|
$
|
1,493,570
|
1. |
Organization
|
2. |
Summary of Significant Accounting Policies
|
Estimated Useful Life
|
|
Computer equipment
|
2-3 years
|
Furniture and fixtures
|
5 years
|
Developed software
|
1-3 years
|
Purchased software and digital assets
|
3-5 years
|
Leasehold improvements
|
Shorter of expected useful life or lease term
|
●
|
Risk-free rate. Risk-free interest rates are derived from U.S. Treasury securities as of the option grant date.
|
|
●
|
Expected dividend yields. Expected dividend yields are based on our historical dividend payments, which have been zero to date (excluding the preferred stock tax distributions made by
Seamless Holdings prior to 2015).
|
|
●
|
Volatility. Since the first quarter of 2018, expected volatility has been based on the historical and
implied volatilities of the Company’s own common stock. Prior to 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical
volatility of our common stock due to our limited trading history as there was no active external or internal market for our common stock prior to the Company’s initial public offering in April 2014.
|
|
●
|
Expected term. The expected term calculation for option awards considers a combination of the Company’s
historical and estimated future exercise behavior.
|
|
●
|
Forfeiture rate. Forfeiture rates are estimated using historical actual forfeiture trends as well as our
judgment of future forfeitures. These rates are evaluated at least annually and any change in compensation expense is recognized in the period of the change. The estimation of stock awards that will ultimately vest requires judgment and, to
the extent actual
|
|
● | results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period in which the estimates are revised. The Company considers many factors when estimating expected forfeitures, including the types of awards and employee class. Actual results, and future changes in estimates, may differ substantially from management’s current estimates. |
3. |
Revenue
|
Year Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Balance at beginning of period
|
$
|
1,460
|
$
|
1,513
|
||||
Additions (reductions) to expense
|
1,497
|
(23
|
)
|
|||||
Write-offs, net of recoveries and other adjustments
|
(145
|
)
|
(30
|
)
|
||||
Balance at end of period
|
$
|
2,812
|
$
|
1,460
|
4. |
Acquisitions
|
Tapingo
|
LevelUp
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Accounts receivable
|
$
|
3,101
|
$
|
6,201
|
$
|
9,302
|
||||||
Prepaid expenses and other current assets
|
843
|
1,396
|
2,239
|
|||||||||
Property and equipment
|
—
|
895
|
895
|
|||||||||
Other assets
|
163
|
—
|
163
|
|||||||||
Restaurant relationships
|
11,279
|
10,217
|
21,496
|
|||||||||
Diner acquisition
|
—
|
3,912
|
3,912
|
|||||||||
Below-market lease intangible
|
—
|
2,205
|
2,205
|
|||||||||
Developed technology
|
9,755
|
20,107
|
29,862
|
|||||||||
Goodwill
|
121,908
|
296,198
|
418,106
|
|||||||||
Net deferred tax asset
|
9,582
|
31,545
|
41,127
|
|||||||||
Accounts payable and accrued expenses
|
(4,573
|
)
|
(3,249
|
)
|
(7,822
|
)
|
||||||
Total purchase price net of cash acquired
|
$
|
152,058
|
$
|
369,427
|
$
|
521,485
|
||||||
Fair value of assumed ISOs attributable to pre-combination service
|
(372
|
)
|
(2,594
|
)
|
(2,966
|
)
|
||||||
Net cash paid
|
$
|
151,686
|
$
|
366,833
|
$
|
518,519
|
Eat24
|
Foodler
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Accounts receivable
|
$
|
8,267
|
$
|
307
|
$
|
8,574
|
||||||
Prepaid expenses and other current assets
|
221
|
—
|
221
|
|||||||||
Property and equipment
|
1,113
|
—
|
1,113
|
|||||||||
Restaurant relationships
|
126,232
|
35,217
|
161,449
|
|||||||||
Diner acquisition
|
35,226
|
1,354
|
36,580
|
|||||||||
Trademarks
|
2,225
|
74
|
2,299
|
|||||||||
Developed technology
|
2,559
|
1,955
|
4,514
|
|||||||||
Goodwill
|
135,955
|
17,452
|
153,407
|
|||||||||
Accounts payable and accrued expenses
|
(30,082
|
)
|
(5,237
|
)
|
(35,319
|
)
|
||||||
Total purchase price net of cash acquired
|
$
|
281,716
|
$
|
51,122
|
$
|
332,838
|
||||||
Fair value of replacement RSUs attributable to pre-combination service
|
(274
|
)
|
—
|
(274
|
)
|
|||||||
Net cash paid
|
$
|
281,442
|
$
|
51,122
|
$
|
332,564
|
Valuation Method
|
|||||||
Tapingo
|
LevelUp
|
Eat24
|
Foodler
|
||||
Restaurant relationships
|
Multi-period excess earnings
|
With or without comparative business valuation
|
Multi-period excess earnings
|
Multi-period excess earnings
|
|||
Diner acquisition
|
n/a
|
Cost to recreate
|
Cost to recreate
|
Cost to recreate
|
|||
Developed technology
|
Cost to recreate
|
Multi-period excess earnings
|
Cost to recreate
|
Cost to recreate
|
|||
Trademark
|
n/a
|
n/a
|
Relief from royalty
|
Relief from royalty
|
Year Ended December 31,
2018
|
||||
(in thousands, except per share data)
|
||||
Revenues
|
$
|
1,041,811
|
||
Net income
|
55,975
|
|||
Net income per share attributable to common shareholders:
|
||||
Basic
|
$
|
0.63
|
||
Diluted
|
$
|
0.61
|
Year Ended December 31,
2018
|
||||
(in thousands)
|
||||
Depreciation and amortization
|
$
|
4,893
|
||
Transaction costs
|
(6,923
|
)
|
||
Stock-based compensation
|
3,748
|
|||
Interest expense
|
1,601
|
|||
Income tax benefit
|
(1,548
|
)
|
5. |
Marketable Securities
|
December 31, 2019
|
||||||||||||||||
Amortized
Cost |
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
17,548
|
$
|
—
|
$
|
(34
|
)
|
$
|
17,514
|
|||||||
Corporate bonds
|
1,300
|
—
|
—
|
1,300
|
||||||||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
46,971
|
—
|
(195
|
)
|
46,776
|
|||||||||||
Corporate bonds
|
2,304
|
2
|
—
|
2,306
|
||||||||||||
Total
|
$
|
68,123
|
$
|
2
|
$
|
(229
|
)
|
$
|
67,896
|
December 31, 2018
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value |
|||||||||||||
(in thousands)
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
12,097
|
$
|
—
|
$
|
(21
|
)
|
$
|
12,076
|
|||||||
Corporate bonds
|
870
|
—
|
—
|
870
|
||||||||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
13,334
|
—
|
(88
|
)
|
13,246
|
|||||||||||
Corporate bonds
|
750
|
—
|
—
|
750
|
||||||||||||
Total
|
$
|
27,051
|
$
|
—
|
$
|
(109
|
)
|
$
|
26,942
|
(in thousands)
|
||||||||||||||||||||||||
Commercial paper
|
$
|
64,290
|
$
|
(229
|
)
|
$
|
—
|
$
|
—
|
$
|
64,290
|
$
|
(229
|
)
|
||||||||||
Total
|
$
|
64,290
|
$
|
(229
|
)
|
$
|
—
|
$
|
—
|
$
|
64,290
|
$
|
(229
|
)
|
December 31, 2018 |
||||||||||||||||||||||||
Less Than 12 Months |
12 Months or Greater |
Total |
||||||||||||||||||||||
Estimated Fair Value |
Unrealized
Loss
|
Estimated Fair Value |
Unrealized Loss |
Estimated
Fair Value
|
Unrealized Loss |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Commercial paper
|
$
|
25,322
|
$
|
(109
|
)
|
$
|
—
|
$
|
—
|
$
|
25,322
|
$
|
(109
|
)
|
||||||||||
Corporate bonds
|
750
|
—
|
—
|
—
|
750
|
—
|
||||||||||||||||||
Total
|
$
|
26,072
|
$
|
(109
|
)
|
$
|
—
|
$
|
—
|
$
|
26,072
|
$
|
(109
|
)
|
6. |
Goodwill and Acquired Intangible Assets
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
Gross
Carrying Amount |
Accumulated Amortization
|
Net
Carrying
Value |
Gross
Carrying
Amount
|
Accumulated Amortization
|
Net
Carrying
Value
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Restaurant relationships
|
$
|
497,788
|
$
|
(135,482
|
)
|
$
|
362,306
|
$
|
494,278
|
$
|
(103,457
|
)
|
$
|
390,821
|
||||||||||
Diner acquisition
|
48,293
|
(19,909
|
)
|
28,384
|
47,541
|
(10,306
|
)
|
37,235
|
||||||||||||||||
Developed technology
|
35,826
|
(15,916
|
)
|
19,910
|
38,385
|
(10,247
|
)
|
28,138
|
||||||||||||||||
Other
|
2,918
|
(2,713
|
)
|
205
|
3,676
|
(2,615
|
)
|
1,061
|
||||||||||||||||
Trademarks
|
—
|
—
|
—
|
2,225
|
(2,225
|
)
|
—
|
|||||||||||||||||
Below-market lease intangible
|
—
|
—
|
—
|
2,206
|
(124
|
)
|
2,082
|
|||||||||||||||||
Total amortizable intangible assets
|
584,825
|
(174,020
|
)
|
410,805
|
588,311
|
(128,974
|
)
|
459,337
|
||||||||||||||||
Indefinite-lived trademarks
|
89,676
|
—
|
89,676
|
89,676
|
—
|
89,676
|
||||||||||||||||||
Total acquired intangible assets
|
$
|
674,501
|
$
|
(174,020
|
)
|
$
|
500,481
|
$
|
677,987
|
$
|
(128,974
|
)
|
$
|
549,013
|
Goodwill
|
Accumulated Impairment
Losses
|
Net
Book Value |
||||||||||
(in thousands)
|
||||||||||||
Balance as of December 31, 2017
|
$
|
589,862
|
$
|
—
|
$
|
589,862
|
||||||
Acquisitions
|
429,377
|
—
|
429,377
|
|||||||||
Balance as of December 31, 2018
|
$
|
1,019,239
|
$
|
—
|
$
|
1,019,239
|
||||||
Acquisitions - measurement period adjustments (a)
|
(11,271
|
)
|
—
|
(11,271
|
)
|
|||||||
Balance as of December 31, 2019
|
$
|
1,007,968
|
$
|
—
|
$
|
1,007,968
|
(a)
|
The change in the carrying amount of goodwill during the year ended December 31, 2019 was primarily related to changes in the fair value of net deferred tax assets for the purchase price allocations of the
Tapingo and LevelUp acquisitions during the measurement period.
|
Year Ended
December 31, 2019
|
Year Ended
December 31, 2018
|
||||||||||||||
Amount
|
Weighted-Average Amortization
Period
|
Amount
|
Weighted-Average Amortization
Period
|
||||||||||||
(in thousands)
|
(years)
|
(in thousands)
|
(years)
|
||||||||||||
Restaurant relationships
|
$
|
3,510
|
19.5
|
$
|
36,697
|
17.5
|
|||||||||
Developed technology
|
—
|
29,862
|
4.7
|
||||||||||||
Diner acquisition
|
752
|
5.0
|
7,294
|
5.0
|
|||||||||||
Below-market lease intangible
|
—
|
2,205
|
5.8
|
||||||||||||
Total
|
$
|
4,262
|
$
|
76,058
|
(in thousands)
|
||||
2020
|
$
|
45,645
|
||
2021
|
38,812
|
|||
2022
|
36,843
|
|||
2023
|
30,348
|
|||
2024
|
28,141
|
|||
Thereafter
|
231,016
|
|||
Total
|
$
|
410,805
|
7. |
Property and Equipment
|
December 31,
2019
|
December 31,
2018
|
|||||||
(in thousands)
|
||||||||
Developed software
|
$
|
154,656
|
$
|
90,302
|
||||
Computer equipment
|
74,052
|
50,767
|
||||||
Leasehold improvements
|
52,962
|
39,550
|
||||||
Furniture and fixtures
|
14,463
|
10,801
|
||||||
Purchased software and digital assets
|
13,395
|
4,696
|
||||||
Construction in progress
|
6,018
|
1,976
|
||||||
Property and equipment
|
315,546
|
198,092
|
||||||
Accumulated depreciation and amortization
|
(142,802
|
)
|
(78,597
|
)
|
||||
Property and equipment, net
|
$
|
172,744
|
$
|
119,495
|
8. |
Other Accruals
|
December 31,
2019
|
December 31,
2018
|
|||||||
(in thousands)
|
||||||||
Gift card liability
|
$
|
12,212
|
$
|
6,155
|
||||
Other accrued expenses (a)
|
49,292
|
38,590
|
||||||
Total Other Accruals
|
$
|
61,504
|
$
|
44,745
|
(a)
|
Other accrued expenses consist of various accrued expenses with no individual item accounting for more than 5% of the total current liabilities as of December 31, 2019 and 2018.
|
9. |
Commitments and Contingencies
|
Year Ended December 31,
2019
|
||||
(in thousands)
|
||||
Fixed operating lease cost
|
$
|
16,900
|
||
Short-term lease cost
|
2,025
|
|||
Sublease income
|
(887
|
)
|
||
Total lease cost
|
$
|
18,038
|
Year Ended December 31,
2019
|
||||
Cash paid for operating lease liabilities (in thousands)
|
$
|
13,694
|
||
Operating lease assets obtained in exchange for new operating lease obligations (in thousands)
|
$
|
29,714
|
||
Weighted-average remaining lease term (years)
|
8.8
|
|||
Weighted-average discount rate
|
5.0
|
%
|
(in thousands)
|
||||
2020
|
$
|
10,185
|
||
2021
|
19,184
|
|||
2022
|
17,205
|
|||
2023
|
17,295
|
|||
2024
|
16,355
|
|||
Thereafter
|
72,304
|
|||
Total future lease payments
|
$
|
152,528
|
||
Less interest
|
(32,096
|
)
|
||
Present value of lease liabilities
|
$
|
120,432
|
(in thousands)
|
||||
2019
|
$
|
13,009
|
||
2020
|
14,874
|
|||
2021
|
14,243
|
|||
2022
|
12,219
|
|||
2023
|
12,220
|
|||
Thereafter
|
57,503
|
|||
Total
|
$
|
124,068
|
10. |
Debt
|
December 31,
2019
|
December 31,
2018
|
|||||||
(in thousands)
|
||||||||
Senior Notes
|
$
|
500,000
|
$
|
—
|
||||
Term loan
|
—
|
120,312
|
||||||
Revolving loan
|
—
|
222,000
|
||||||
Total debt
|
$
|
500,000
|
$
|
342,312
|
||||
Less current portion
|
—
|
(6,250
|
)
|
|||||
Less unamortized deferred debt issuance costs
|
(6,991
|
)
|
(514
|
)
|
||||
Long-term debt
|
$
|
493,009
|
$
|
335,548
|
(in thousands)
|
||||
2020
|
$
|
—
|
||
2021
|
—
|
|||
2022
|
—
|
|||
2023
|
—
|
|||
2024
|
—
|
|||
Thereafter
|
500,000
|
|||
Total
|
$
|
500,000
|
11. |
Stock-Based Compensation
|
Year Ended December 31,
|
|||||||||||
2019
|
|
2018 |
2017
|
||||||||
Weighted-average fair value options granted
|
$ |
30.91
|
$
|
66.19
|
$ |
15.19
|
|||||
Average risk-free interest rate
|
2.42
|
%
|
2.61
|
%
|
1.65
|
%
|
|||||
Expected stock price volatility (a)
|
48.3
|
%
|
46.4
|
%
|
48.7
|
%
|
|||||
Dividend yield
|
None
|
None
|
None
|
||||||||
Expected stock option life (years)
|
4.00
|
3.51
|
(b) |
4.00
|
(a)
|
Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical
volatility of the Company’s own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.
|
(b)
|
The expected term for Tapingo and LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date.
|
Options
|
Weighted-Average
Exercise
Price
|
Aggregate
Intrinsic Value (thousands) |
Weighted-Average Exercise
Term (years) |
|||||||||||||
Outstanding at December 31, 2018
|
2,650,839
|
$
|
33.13
|
$
|
120,977
|
6.87
|
||||||||||
Granted
|
333,929
|
76.98
|
||||||||||||||
Forfeited
|
(30,086
|
)
|
83.05
|
|||||||||||||
Exercised
|
(204,407
|
)
|
21.87
|
|||||||||||||
Outstanding at December 31, 2019
|
2,750,275
|
38.74
|
50,737
|
6.28
|
||||||||||||
Vested and expected to vest at December 31, 2019
|
2,749,867
|
38.73
|
50,737
|
6.28
|
||||||||||||
Exercisable at December 31, 2019
|
1,993,867
|
$
|
28.75
|
$
|
46,412
|
5.54
|
Restricted Stock Units
|
||||||||
Shares
|
Weighted-Average Grant Date
Fair Value
|
|||||||
Outstanding at December 31, 2018
|
2,328,857
|
$
|
67.33
|
|||||
Granted
|
2,368,732
|
69.82
|
||||||
Forfeited
|
(579,612
|
)
|
70.30
|
|||||
Vested
|
(969,595
|
)
|
60.96
|
|||||
Cancelled
|
(52,357
|
)
|
85.39
|
|||||
Outstanding at December 31, 2019
|
3,096,025
|
$
|
70.62
|
12. |
Income Taxes
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands)
|
||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
328
|
$
|
(2,934
|
)
|
$
|
16,852
|
|||||
State
|
(1,139
|
)
|
3,827
|
4,721
|
||||||||
Foreign
|
327
|
335
|
271
|
|||||||||
Total current
|
(484
|
)
|
1,228
|
21,844
|
||||||||
Deferred:
|
||||||||||||
Federal
|
(5,851
|
)
|
2,608
|
(30,794
|
)
|
|||||||
State
|
(1,791
|
)
|
(884
|
)
|
(385
|
)
|
||||||
Foreign
|
(84
|
)
|
—
|
—
|
||||||||
Total deferred
|
(7,726
|
)
|
1,724
|
(31,179
|
)
|
|||||||
Total income tax (benefit) expense
|
$
|
(8,210
|
)
|
$
|
2,952
|
$
|
(9,335
|
)
|
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
(in thousands)
|
||||||||||||
Domestic source
|
$
|
(29,227
|
)
|
$
|
80,878
|
$
|
88,357
|
|||||
Foreign source
|
2,451
|
555
|
1,291
|
|||||||||
Income (loss) before provision for income taxes
|
$
|
(26,776
|
)
|
$
|
81,433
|
$
|
89,648
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands)
|
||||||||||||
Income tax expense (benefit) at statutory rate
|
$
|
(5,623
|
)
|
$
|
17,101
|
$
|
31,377
|
|||||
Excess compensation
|
1,786
|
1,753
|
—
|
|||||||||
State income taxes
|
(2,189
|
)
|
1,248
|
5,011
|
||||||||
Effect of federal rate change
|
—
|
—
|
(36,768
|
)
|
||||||||
Stock-based compensation
|
145
|
(15,924
|
)
|
(7,072
|
)
|
|||||||
Research and development tax credit
|
(2,995
|
)
|
(1,470
|
)
|
(800
|
)
|
||||||
Uncertain tax position
|
67
|
(545
|
)
|
(55
|
)
|
|||||||
Foreign rate differential
|
(18
|
)
|
(57
|
)
|
(203
|
)
|
||||||
Meals and entertainment
|
659
|
292
|
286
|
|||||||||
Unremitted earnings tax
|
—
|
—
|
363
|
|||||||||
All other
|
(42
|
)
|
554
|
(1,474
|
)
|
|||||||
Total income tax (benefit) expense
|
$
|
(8,210
|
)
|
$
|
2,952
|
$
|
(9,335
|
)
|
As of December 31,
|
||||||||
2019
|
2018
|
|||||||
(in thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Loss and credit carry forwards
|
$
|
84,153
|
$
|
72,466
|
||||
Accrued expenses
|
—
|
4,128
|
||||||
Stock-based compensation
|
8,302
|
8,832
|
||||||
Lease accounting
|
5,817
|
—
|
||||||
Fixed assets - state
|
2,514
|
2,295
|
||||||
Total deferred tax assets
|
100,786
|
87,721
|
||||||
Valuation allowance
|
(15,655
|
)
|
(23,840
|
)
|
||||
Net deferred tax assets
|
85,131
|
63,881
|
||||||
Deferred tax liabilities:
|
||||||||
Fixed assets
|
(8,802
|
)
|
(8,607
|
)
|
||||
Intangible assets
|
(99,870
|
)
|
(101,451
|
)
|
||||
Prepaid expenses
|
(882
|
)
|
(206
|
)
|
||||
Accrued expenses
|
(2,740
|
)
|
—
|
|||||
Total deferred tax liabilities
|
(112,294
|
)
|
(110,264
|
)
|
||||
Net deferred tax liability
|
$
|
(27,163
|
)
|
$
|
(46,383
|
)
|
2019
|
2018
|
Beginning
Year of
Expiration
|
||||||||||
(in thousands)
|
||||||||||||
U.S. federal loss carry forwards
|
$
|
34,268
|
$
|
29,853
|
2027
|
|||||||
U.S. state and local loss carry forwards
|
21,258
|
18,147
|
2027
|
|||||||||
Israeli loss carry forward
|
15,204
|
15,382
|
Indefinite
|
|||||||||
Illinois Edge Credits(a)
|
15,523
|
11,992
|
2018
|
|||||||||
Federal research and development credit
|
5,359
|
1,986
|
2028
|
|||||||||
State research and development credit
|
1,401
|
1,710
|
2018
|
(a)
|
Amounts are before the federal benefit of state tax.
|
As of December 31, | ||||||||
|
2019 |
2018
|
||||||
(in thousands)
|
||||||||
Balance at beginning of period
|
$
|
751
|
$
|
2,864
|
||||
Reductions for tax positions taken in prior years
|
—
|
(2,260
|
)
|
|||||
Additions for tax positions taken in the current year
|
67
|
147
|
||||||
Balance at end of period
|
$
|
818
|
$
|
751
|
13. |
Stockholders’ Equity
|
14. |
Retirement Plan
|
15. |
Earnings Per Share Attributable to Common Stockholders
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands, except per share data)
|
||||||||||||
Basic earnings (loss) per share:
|
||||||||||||
Net income (loss) attributable to common stockholders (numerator)
|
$
|
(18,566
|
)
|
$
|
78,481
|
$
|
98,983
|
|||||
Shares used in computation (denominator)
|
||||||||||||
Weighted-average common shares outstanding
|
91,247
|
89,447
|
86,297
|
|||||||||
Basic earnings (loss) per share
|
$
|
(0.20
|
)
|
$
|
0.88
|
$
|
1.15
|
|||||
Diluted earnings (loss) per share:
|
||||||||||||
Net income (loss) attributable to common stockholders (numerator)
|
$
|
(18,566
|
)
|
$
|
78,481
|
$
|
98,983
|
|||||
Shares used in computation (denominator)
|
||||||||||||
Weighted-average common shares outstanding
|
91,247
|
89,447
|
86,297
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
—
|
1,601
|
1,059
|
|||||||||
Restricted stock units
|
—
|
1,306
|
826
|
|||||||||
Weighted-average diluted shares
|
91,247
|
92,354
|
88,182
|
|||||||||
Diluted earnings (loss) per share
|
$
|
(0.20
|
)
|
$
|
0.85
|
$
|
1.12
|
Year Ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands)
|
||||||||||||
Anti-dilutive shares underlying stock-based awards:
|
||||||||||||
Stock options
|
2,750
|
216
|
—
|
|||||||||
Restricted stock units
|
3,096
|
223
|
36
|
16. |
Fair Value Measurement
|
●
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
|
●
|
Level 2
|
Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.
|
|
●
|
Level 3
|
Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk
premiums that a market participant would require.
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||
Level 2
|
Carrying
Value |
Level 2
|
Level 3
|
Carrying
Value
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Money market funds
|
$
|
28
|
$
|
28
|
$
|
61
|
$
|
—
|
$
|
61
|
||||||||||
Commercial paper
|
64,290
|
64,519
|
25,322
|
—
|
25,431
|
|||||||||||||||
Corporate bonds
|
3,606
|
3,604
|
1,620
|
—
|
1,620
|
|||||||||||||||
Total assets
|
$
|
67,924
|
$
|
68,151
|
$
|
27,003
|
$
|
—
|
$
|
27,112
|
||||||||||
Liabilities
|
||||||||||||||||||||
Long-term debt, including current maturities
|
$
|
467,500
|
$
|
500,000
|
$
|
—
|
$
|
342,745
|
$
|
342,312
|
||||||||||
Total liabilities
|
$
|
467,500
|
$
|
500,000
|
$
|
—
|
$
|
342,745
|
$
|
342,312
|
●
|
Tested the design and operating effectiveness of the Company’s internal controls over the accounting for acquired intangible assets, including the appropriateness of valuation methods
selected and key inputs used in the valuations.
|
|
●
|
Evaluated the significant assumptions and methods used in developing the fair value estimates including assessing the appropriateness of (1) the methods used to value the acquired
intangible assets, and (2) the key inputs used in valuing the acquired intangible assets, including discount rates, estimated future cash flows, initial developer costs, expected profits, royalty rates, rates of attrition, and expected
rates of return.
|
|
●
|
Utilized a valuation specialist to assist in the evaluation of the appropriateness of the valuation models and certain assumptions applied in the valuation of the acquired intangible
assets.
|
●
|
Tested the design and operating effectiveness of internal controls over the identification and calculation of website and software development costs to be capitalized as well as the
completeness and accuracy of reports used in management’s calculation.
|
|
●
|
Tested the completeness and accuracy of reports used in management’s calculations of capitalized website and software development costs, including testing mathematical accuracy.
|
|
●
|
Evaluated individual costs incurred to assess whether website and software development costs were properly capitalized based upon the nature and stage of the work performed and whether the
requisite capitalization criteria were met.
|
|
●
|
Tested capitalized costs in the post-implementation phase to determine if the costs related to substantial upgrades and enhancements and met the criteria for capitalization.
|
|
●
|
Performed corroborative interviews with Company personnel involved in website and software development regarding the nature and functionality of costs incurred.
|
June 30,
2020
|
December 31,
2019
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
484,760
|
$
|
375,909
|
||||
Short-term investments
|
48,616
|
49,275
|
||||||
Accounts receivable, less allowances for doubtful accounts
|
75,726
|
119,658
|
||||||
Income tax receivable
|
19,390
|
3,960
|
||||||
Prepaid expenses and other current assets
|
18,721
|
17,515
|
||||||
Total current assets
|
647,213
|
566,317
|
||||||
PROPERTY AND EQUIPMENT:
|
||||||||
Property and equipment, net of depreciation and amortization
|
212,772
|
172,744
|
||||||
OTHER ASSETS:
|
||||||||
Other assets
|
36,836
|
26,836
|
||||||
Operating lease right-of-use asset
|
99,058
|
100,632
|
||||||
Goodwill
|
1,007,968
|
1,007,968
|
||||||
Acquired intangible assets, net of amortization
|
476,309
|
500,481
|
||||||
Total other assets
|
1,620,171
|
1,635,917
|
||||||
TOTAL ASSETS
|
$
|
2,480,156
|
$
|
2,374,978
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Restaurant food liability
|
$
|
206,306
|
$
|
131,753
|
||||
Accounts payable
|
24,508
|
26,748
|
||||||
Accrued payroll
|
34,166
|
19,982
|
||||||
Current operating lease liability
|
16,642
|
9,376
|
||||||
Other accruals
|
124,555
|
61,504
|
||||||
Total current liabilities
|
406,177
|
249,363
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Deferred taxes, non-current
|
11,607
|
27,163
|
||||||
Noncurrent operating lease liability
|
110,193
|
111,056
|
||||||
Long-term debt
|
493,475
|
493,009
|
||||||
Other accruals
|
4,152
|
817
|
||||||
Total long-term liabilities
|
619,427
|
632,045
|
||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of June 30, 2020 and December 31, 2019; issued and outstanding: no shares as of June 30, 2020 and December 31, 2019.
|
-
|
-
|
||||||
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at June 30, 2020 and December 31, 2019; issued and outstanding: 92,235,195 and 91,576,060 shares as of June 30, 2020 and December 31, 2019,
respectively
|
9
|
9
|
||||||
Accumulated other comprehensive loss
|
(2,330
|
)
|
(1,628
|
)
|
||||
Additional paid-in capital
|
1,204,922
|
1,164,400
|
||||||
Retained earnings
|
251,951
|
330,789
|
||||||
Total stockholders’ equity
|
$
|
1,454,552
|
$
|
1,493,570
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,480,156
|
$
|
2,374,978
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenues
|
$
|
459,282
|
$
|
325,058
|
$
|
822,262
|
$
|
648,828
|
||||||||
Costs and expenses:
|
||||||||||||||||
Operations and support
|
318,867
|
162,406
|
533,428
|
323,756
|
||||||||||||
Sales and marketing
|
94,004
|
74,128
|
184,746
|
152,582
|
||||||||||||
Technology (exclusive of amortization)
|
30,228
|
29,400
|
61,501
|
56,650
|
||||||||||||
General and administrative
|
32,237
|
25,784
|
71,186
|
48,571
|
||||||||||||
Depreciation and amortization
|
34,557
|
27,223
|
67,920
|
52,312
|
||||||||||||
Total costs and expenses
|
509,893
|
318,941
|
918,781
|
633,871
|
||||||||||||
Income (loss) from operations
|
(50,611
|
)
|
6,117
|
(96,519
|
)
|
14,957
|
||||||||||
Interest expense - net
|
6,816
|
5,467
|
13,196
|
8,279
|
||||||||||||
Income (loss) before provision for income taxes
|
(57,427
|
)
|
650
|
(109,715
|
)
|
6,678
|
||||||||||
Income tax benefit
|
(12,016
|
)
|
(602
|
)
|
(30,877
|
)
|
(1,464
|
)
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
(45,411
|
)
|
$
|
1,252
|
$
|
(78,838
|
)
|
$
|
8,142
|
||||||
Net income (loss) per share attributable to common stockholders:
|
||||||||||||||||
Basic
|
$
|
(0.49
|
)
|
$
|
0.01
|
$
|
(0.86
|
)
|
$
|
0.09
|
||||||
Diluted
|
$
|
(0.49
|
)
|
$
|
0.01
|
$
|
(0.86
|
)
|
$
|
0.09
|
||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
|
||||||||||||||||
Basic
|
92,116
|
91,177
|
91,954
|
91,064
|
||||||||||||
Diluted
|
92,116
|
92,786
|
91,954
|
92,852
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net income (loss)
|
$
|
(45,411
|
)
|
$
|
1,252
|
$
|
(78,838
|
)
|
$
|
8,142
|
||||||
OTHER COMPREHENSIVE LOSS
|
||||||||||||||||
Foreign currency translation adjustments
|
(59
|
)
|
(316
|
)
|
(702
|
)
|
(89
|
)
|
||||||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
(45,470
|
)
|
$
|
936
|
$
|
(79,540
|
)
|
$
|
8,053
|
Six Months Ended June 30,
|
||||||||
2020
|
2019
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income (loss)
|
$
|
(78,838
|
)
|
$
|
8,142
|
|||
Adjustments to reconcile net income (loss) to net cash from operating activities:
|
||||||||
Depreciation
|
18,820
|
13,626
|
||||||
Amortization of intangible assets and developed software
|
49,100
|
38,686
|
||||||
Stock-based compensation
|
41,221
|
36,527
|
||||||
Deferred taxes
|
(15,556
|
)
|
298
|
|||||
Other
|
2,548
|
3,240
|
||||||
Change in assets and liabilities:
|
||||||||
Accounts receivable
|
43,390
|
(13,349
|
)
|
|||||
Income taxes receivable
|
(15,429
|
)
|
429
|
|||||
Prepaid expenses and other assets
|
(5,476
|
)
|
(14,857
|
)
|
||||
Restaurant food liability
|
74,612
|
(3,078
|
)
|
|||||
Accounts payable
|
547
|
(10,216
|
)
|
|||||
Accrued payroll
|
14,190
|
3,122
|
||||||
Other accruals
|
61,732
|
7,219
|
||||||
Net cash provided by operating activities
|
190,861
|
69,789
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchases of investments
|
(56,554
|
)
|
(25,526
|
)
|
||||
Proceeds from maturity of investments
|
57,500
|
21,636
|
||||||
Capitalized website and development costs
|
(29,269
|
)
|
(22,188
|
)
|
||||
Purchases of property and equipment
|
(41,800
|
)
|
(23,140
|
)
|
||||
Acquisition of other intangible assets
|
(510
|
)
|
(8,889
|
)
|
||||
Acquisitions of businesses, net of cash acquired
|
-
|
127
|
||||||
Other cash flows from investing activities
|
(525
|
)
|
-
|
|||||
Net cash used in investing activities
|
(71,158
|
)
|
(57,980
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from the issuance of long-term debt
|
175,000
|
500,000
|
||||||
Repayments of borrowings under the credit facility
|
(175,000
|
)
|
(342,313
|
)
|
||||
Taxes paid related to net settlement of stock-based compensation awards
|
(14,240
|
)
|
(15,360
|
)
|
||||
Proceeds from exercise of stock options
|
3,667
|
2,930
|
||||||
Payments for debt issuance costs
|
(259
|
)
|
(8,954
|
)
|
||||
Other cash flows from financing activities
|
(454
|
)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
(11,286
|
)
|
136,303
|
|||||
Net change in cash, cash equivalents, and restricted cash
|
108,417
|
148,112
|
||||||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(651
|
)
|
(2
|
)
|
||||
Cash, cash equivalents, and restricted cash at beginning of year
|
379,595
|
215,802
|
||||||
Cash, cash equivalents, and restricted cash at end of the period
|
$
|
487,361
|
$
|
363,912
|
||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
|
||||||||
Cash paid for income taxes
|
$
|
-
|
$
|
567
|
||||
Capitalized property, equipment and website and development costs in accounts payable at period end
|
2,846
|
5,310
|
||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
||||||||
Cash and cash equivalents
|
$
|
484,760
|
$
|
358,847
|
||||
Restricted cash included in prepaid expenses and other current assets
|
-
|
1,904
|
||||||
Restricted cash included in other assets
|
2,601
|
3,161
|
||||||
Total cash, cash equivalents, and restricted cash
|
$
|
487,361
|
$
|
363,912
|
Common stock
|
||||||||||||||||||||||||
Shares
|
Amount
|
Additional
paid-in
capital
|
Accumulated
other comprehensive loss
|
Retained
earnings
|
Total
stockholders' equity
|
|||||||||||||||||||
Three Months Ended June 30, 2020
|
||||||||||||||||||||||||
Balance at March 31, 2020
|
91,916,978
|
$
|
9
|
$
|
1,182,757
|
$
|
(2,271
|
)
|
$
|
297,362
|
$
|
1,477,857
|
||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(45,411
|
)
|
(45,411
|
)
|
||||||||||||||||
Currency translation
|
-
|
-
|
-
|
(59
|
)
|
-
|
(59
|
)
|
||||||||||||||||
Stock-based compensation
|
-
|
-
|
26,101
|
-
|
-
|
26,101
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
448,698
|
-
|
2,253
|
-
|
-
|
2,253
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(130,481
|
)
|
-
|
(6,189
|
)
|
-
|
-
|
(6,189
|
)
|
|||||||||||||||
Balance at June 30, 2020
|
92,235,195
|
$
|
9
|
$
|
1,204,922
|
$
|
(2,330
|
)
|
$
|
251,951
|
$
|
1,454,552
|
||||||||||||
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||
Balance at March 31, 2019
|
91,074,285
|
$
|
9
|
$
|
1,107,047
|
$
|
(1,664
|
)
|
$
|
356,245
|
$
|
1,461,637
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
1,252
|
1,252
|
||||||||||||||||||
Currency translation
|
-
|
-
|
-
|
(316
|
)
|
-
|
(316
|
)
|
||||||||||||||||
Stock-based compensation
|
-
|
-
|
24,015
|
-
|
-
|
24,015
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
234,356
|
-
|
506
|
-
|
-
|
506
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(77,725
|
)
|
-
|
(5,394
|
)
|
-
|
-
|
(5,394
|
)
|
|||||||||||||||
Balance at June 30, 2019
|
91,230,916
|
$
|
9
|
$
|
1,126,174
|
$
|
(1,980
|
)
|
$
|
357,497
|
$
|
1,481,700
|
||||||||||||
Six Months Ended June 30, 2020
|
||||||||||||||||||||||||
Balance at December 31, 2019
|
91,576,060
|
$
|
9
|
$
|
1,164,400
|
$
|
(1,628
|
)
|
$
|
330,789
|
$
|
1,493,570
|
||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(78,838
|
)
|
(78,838
|
)
|
||||||||||||||||
Currency translation
|
-
|
-
|
-
|
(702
|
)
|
-
|
(702
|
)
|
||||||||||||||||
Stock-based compensation
|
-
|
-
|
51,095
|
-
|
-
|
51,095
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
943,223
|
-
|
3,667
|
-
|
-
|
3,667
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(284,088
|
)
|
-
|
(14,240
|
)
|
-
|
-
|
(14,240
|
)
|
|||||||||||||||
Balance at June 30, 2020
|
92,235,195
|
$
|
9
|
$
|
1,204,922
|
$
|
(2,330
|
)
|
$
|
251,951
|
$
|
1,454,552
|
||||||||||||
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
90,756,548
|
$
|
9
|
$
|
1,094,866
|
$
|
(1,891
|
)
|
$
|
349,355
|
$
|
1,442,339
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
8,142
|
8,142
|
||||||||||||||||||
Currency translation
|
-
|
-
|
-
|
(89
|
)
|
-
|
(89
|
)
|
||||||||||||||||
Stock-based compensation
|
-
|
-
|
43,738
|
-
|
-
|
43,738
|
||||||||||||||||||
Stock option exercises and vesting of restricted stock units, net of withholdings and other
|
676,527
|
-
|
2,930
|
-
|
-
|
2,930
|
||||||||||||||||||
Shares repurchased and retired to satisfy tax withholding upon vesting
|
(202,159
|
)
|
-
|
(15,360
|
)
|
-
|
-
|
(15,360
|
)
|
|||||||||||||||
Balance at June 30, 2019
|
91,230,916
|
$
|
9
|
$
|
1,126,174
|
$
|
(1,980
|
)
|
$
|
357,497
|
$
|
1,481,700
|
1. |
Organization
|
2. |
Significant Accounting Policies
|
3. |
Merger Agreement
|
4. |
Marketable Securities
|
June 30, 2020
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
19,894
|
$
|
-
|
$
|
(14
|
)
|
$
|
19,880
|
|||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
42,296
|
-
|
(79
|
)
|
42,217
|
|||||||||||
Corporate bonds
|
6,320
|
4
|
(1
|
)
|
6,323
|
|||||||||||
Total
|
$
|
68,510
|
$
|
4
|
$
|
(94
|
)
|
$
|
68,420
|
December 31, 2019
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Estimated
Fair Value |
|||||||||||||
(in thousands)
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Commercial paper
|
$
|
17,548
|
$
|
-
|
$
|
(34
|
)
|
$
|
17,514
|
|||||||
Corporate bonds
|
1,300
|
-
|
-
|
1,300
|
||||||||||||
Short-term investments
|
||||||||||||||||
Commercial paper
|
46,971
|
-
|
(195
|
)
|
46,776
|
|||||||||||
Corporate bonds
|
2,304
|
2
|
-
|
2,306
|
||||||||||||
Total
|
$
|
68,123
|
$
|
2
|
$
|
(229
|
)
|
$
|
67,896
|
June 30, 2020 |
||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Estimated
Fair Value |
Unrealized
Loss
|
Estimated
Fair Value
|
Unrealized
Loss
|
Estimated
Fair Value
|
Unrealized
Loss
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Commercial paper
|
$
|
62,097
|
$
|
(93
|
)
|
$
|
-
|
$
|
-
|
$
|
62,097
|
$
|
(93
|
)
|
||||||||||
Corporate bonds
|
2,301
|
(1
|
)
|
-
|
-
|
2,301
|
(1
|
)
|
||||||||||||||||
Total
|
$
|
64,398
|
$
|
(94
|
)
|
$
|
-
|
$
|
-
|
$
|
64,398
|
$
|
(94
|
)
|
December 31, 2019 |
||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Estimated Fair Value
|
Unrealized Loss
|
Estimated Fair Value
|
Unrealized Loss
|
Estimated Fair Value
|
Unrealized Loss
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Commercial paper
|
$
|
64,290
|
$
|
(229
|
)
|
$
|
-
|
$
|
-
|
$
|
64,290
|
$
|
(229
|
)
|
||||||||||
Total
|
$
|
64,290
|
$
|
(229
|
)
|
$
|
-
|
$
|
-
|
$
|
64,290
|
$
|
(229
|
)
|
5. |
Goodwill and Acquired Intangible Assets
|
June 30, 2020
|
December 31, 2019
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated Amortization
|
Net
Carrying
Value
|
Gross
Carrying
Amount
|
Accumulated Amortization
|
Net
Carrying
Value
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Restaurant relationships
|
$
|
492,791
|
$
|
(145,677
|
)
|
$
|
347,114
|
$
|
497,788
|
$
|
(135,482
|
)
|
$
|
362,306
|
||||||||||
Diner acquisition
|
48,293
|
(24,738
|
)
|
23,555
|
48,293
|
(19,909
|
)
|
28,384
|
||||||||||||||||
Developed technology
|
35,826
|
(20,031
|
)
|
15,795
|
35,826
|
(15,916
|
)
|
19,910
|
||||||||||||||||
Other
|
2,918
|
(2,749
|
)
|
169
|
2,918
|
(2,713
|
)
|
205
|
||||||||||||||||
Total amortizable intangible assets
|
579,828
|
(193,195
|
)
|
386,633
|
584,825
|
(174,020
|
)
|
410,805
|
||||||||||||||||
Indefinite-lived trademarks
|
89,676
|
-
|
89,676
|
89,676
|
-
|
89,676
|
||||||||||||||||||
Total acquired intangible assets
|
$
|
669,504
|
$
|
(193,195
|
)
|
$
|
476,309
|
$
|
674,501
|
$
|
(174,020
|
)
|
$
|
500,481
|
(in thousands)
|
||||
The remainder of 2020
|
$
|
21,472
|
||
2021
|
38,809
|
|||
2022
|
36,847
|
|||
2023
|
30,348
|
|||
2024
|
28,141
|
|||
Thereafter
|
231,016
|
|||
Total
|
$
|
386,633
|
6. |
Property and Equipment
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Developed software
|
$
|
186,986
|
$
|
154,656
|
||||
Computer equipment
|
99,243
|
74,052
|
||||||
Leasehold improvements
|
53,452
|
52,962
|
||||||
Furniture and fixtures
|
16,689
|
14,463
|
||||||
Purchased software and digital assets
|
16,361
|
13,395
|
||||||
Construction in progress
|
18,667
|
6,018
|
||||||
Property and equipment
|
391,398
|
315,546
|
||||||
Accumulated depreciation and amortization
|
(178,626
|
)
|
(142,802
|
)
|
||||
Property and equipment, net
|
$
|
212,772
|
$
|
172,744
|
7. |
Commitments and Contingencies
|
8. |
Debt
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Senior Notes
|
$
|
500,000
|
$
|
500,000
|
||||
Less unamortized deferred debt issuance costs
|
(6,525
|
)
|
(6,991
|
)
|
||||
Long-term debt
|
$
|
493,475
|
$
|
493,009
|
9. |
Stock-Based Compensation
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Weighted-average fair value options granted
|
$
|
20.46
|
$
|
30.91
|
||||
Average risk-free interest rate
|
1.26
|
%
|
2.42
|
%
|
||||
Expected stock price volatility
|
49.6
|
%
|
48.3
|
%
|
||||
Dividend yield
|
None
|
None
|
||||||
Expected stock option life (years)
|
4.00
|
4.00
|
Options
|
Weighted-Average Exercise Price
|
Aggregate
Intrinsic
Value
(thousands)
|
Weighted-Average Exercise Term (years)
|
|||||||||||||
Outstanding at December 31, 2019
|
2,750,275
|
$
|
38.74
|
$
|
50,737
|
6.28
|
||||||||||
Granted
|
264,245
|
51.59
|
||||||||||||||
Forfeited
|
(50,090
|
)
|
70.26
|
|||||||||||||
Exercised
|
(146,556
|
)
|
24.94
|
|||||||||||||
Outstanding at June 30, 2020
|
2,817,874
|
40.10
|
93,703
|
6.12
|
||||||||||||
Vested and expected to vest at June 30, 2020
|
2,749,366
|
39.57
|
92,732
|
6.06
|
||||||||||||
Exercisable at June 30, 2020
|
2,122,175
|
$
|
32.92
|
$
|
83,954
|
5.35
|
Restricted Stock Units
|
||||||||
Shares
|
Weighted-Average Grant Date
Fair Value
|
|||||||
Outstanding at December 31, 2019
|
3,096,025
|
$
|
70.62
|
|||||
Granted
|
2,007,254
|
50.46
|
||||||
Forfeited
|
(259,335
|
)
|
68.61
|
|||||
Vested
|
(796,667
|
)
|
68.04
|
|||||
Outstanding at June 30, 2020
|
4,047,277
|
$
|
61.25
|
10. |
Income Taxes
|
11. |
Stockholders’ Equity
|
12. |
Earnings Per Share Attributable to Common Stockholders
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Basic earnings (loss) per share:
|
||||||||||||||||
Net income (loss) attributable to common stockholders (numerator)
|
$
|
(45,411
|
)
|
$
|
1,252
|
$
|
(78,838
|
)
|
$
|
8,142
|
||||||
Shares used in computation (denominator)
|
||||||||||||||||
Weighted-average common shares outstanding
|
92,116
|
91,177
|
91,954
|
91,064
|
||||||||||||
Basic earnings (loss) per share
|
$
|
(0.49
|
)
|
$
|
0.01
|
$
|
(0.86
|
)
|
$
|
0.09
|
||||||
Diluted earnings (loss) per share:
|
||||||||||||||||
Net income (loss) attributable to common stockholders (numerator)
|
$
|
(45,411
|
)
|
$
|
1,252
|
$
|
(78,838
|
)
|
$
|
8,142
|
||||||
Shares used in computation (denominator)
|
||||||||||||||||
Weighted-average common shares outstanding
|
92,116
|
91,177
|
91,954
|
91,064
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options
|
-
|
1,188
|
-
|
1,248
|
||||||||||||
Restricted stock units
|
-
|
421
|
-
|
540
|
||||||||||||
Weighted-average diluted shares
|
92,116
|
92,786
|
91,954
|
92,852
|
||||||||||||
Diluted earnings (loss) per share
|
$
|
(0.49
|
)
|
$
|
0.01
|
$
|
(0.86
|
)
|
$
|
0.09
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Anti-dilutive shares underlying stock-based awards:
|
||||||||||||||||
Stock options
|
2,818
|
854
|
2,818
|
853
|
||||||||||||
Restricted stock units
|
4,047
|
2,060
|
4,047
|
633
|
13. |
Fair Value Measurement
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
|
Level 2
|
Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.
|
|
Level 3
|
Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk
premiums that a market participant would require.
|
June 30, 2020
|
December 31, 2019
|
|||||||||||||||
Level 2
|
Carrying
Value
|
Level 2
|
Carrying
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Money market funds
|
$
|
49
|
$
|
49
|
$
|
28
|
$
|
28
|
||||||||
Commercial paper
|
62,097
|
62,190
|
64,290
|
64,519
|
||||||||||||
Corporate bonds
|
6,323
|
6,320
|
3,606
|
3,604
|
||||||||||||
Total assets
|
$
|
68,469
|
$
|
68,559
|
$
|
67,924
|
$
|
68,151
|
||||||||
Liabilities
|
||||||||||||||||
Long-term debt, including current maturities
|
$
|
511,850
|
$
|
500,000
|
$
|
467,500
|
$
|
500,000
|
||||||||
Total liabilities
|
$
|
511,850
|
$
|
500,000
|
$
|
467,500
|
$
|
500,000
|