Shares in online takeaway ordering service Just Eat (LSE: JE) have soared by as much as 10% today after it announced the acquisition of four takeaway businesses for €125m. The purchases are from Rocket Internet in Spain and Italy, as well as from foodpanda in Brazil and Mexico. They will be funded through existing cash resources and are expected to boost Just Eat’s 2017 EBITDA figure by around £5m.
Just Eat states in the release that the acquired businesses are highly complementary to its existing offering in these countries and are in-line with its strategy to dominate the markets in which it operates. As such, they seem to be a sound move by the company as it seeks to generate further economies of scale as well as greater efficiencies over the medium term.
With Just Eat forecast to grow its bottom line by 59% in the current year, its price to earnings growth (PEG) ratio of 0.9 holds considerable appeal. Not only is online takeaway growth likely to be strong in future years, Just Eat is very well-diversified across multiple geographies and this brings a degree of resilience as well as the opportunity to record significant capital gains for the company’s investors.
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Also announcing an acquisition today is Halma (LSE: HLMA), with the health care company purchasing CenTrak for $140m in cash. CenTrak designs and manufactures sensors and proprietary communication technology that provides reliable and precise location data for healthcare facilities to ensure compliance with regulations.
The acquisition appears to represent good value for money for Halma, with it being a multiple of 2015’s profit before tax of around 14. And with CenTrak’s technologies being very similar to those used by other Halma companies in its infrastructure safety and environmental & analysis sectors, its integration could be relatively smooth.
However, with Halma trading on a price to earnings (P/E) ratio of 24.2 and being forecast to increase its bottom line by 8% in the current year, its PEG ratio of 3 lacks appeal at the present time.
Meanwhile, Centrica (LSE: CNA) has announced an asset disposal today, with the energy company selling off its 50% stake in the Glens of Foudland, Lynn and Inner Dowsing wind farms for £115m. Centrica will purchase 100% of the power and 50% of the Renewable Obligation Certificates from the three wind farms until 2024, with the deal being in-line with its strategy of selling off wind power generation assets.
Looking ahead, Centrica is set to sell off more assets in the coming years as it seeks to become a more focused domestic energy supplier. With the outlook for the oil price and wider energy sector being relatively downbeat, this could prove to be a sound move. And with Centrica set to deliver major cost savings which could boost dividends upwards from an already appealing 6.2%, now could be a great time to buy a slice of the business.
