Yelp to sell Eat24 to GrubHub
GrubHub (GRUB) has announced that it will be acquiring food delivery service company Eat24 from Yelp (YELP) for $287.5 million. Yelp announced its fiscal 2Q17 numbers on Thursday, August 3, and the stock has surged 20% to $37 since the results came out.
The deal could be a positive for Yelp. The food delivery space is becoming increasingly competitive, and Yelp’s strength is providing information about restaurants. The company’s stock fell 17.7% before the deal and the release. Eat24 will enhance GrubHub’s scale, which GrubHub says will help it compete with other companies.
Yelp and GrubHub post satisfactory numbers
Yelp’s revenue for fiscal 2Q17 came in at $208.9 million, compared with analysts’ estimate of $205 million. Its revenue rose 20% from 2Q16. Its advertising revenue came in at ~$187 million. The company estimates that it will have revenue of $855 million–$865 million in fiscal 2017, above the $856 million that Wall Street expects.
The company raked in EPS (earnings per share) of $0.09, while Wall Street expected -$0.03. In the same quarter last year, the company posted EPS of $0.01.
GrubHub also reported its quarterly earnings on Thursday, and they were in line with estimates. Its revenue beat Wall Street estimates. The company posted EPS of $0.26 and revenue of $159 million. Wall Street expected revenue of $153 million and EPS of $0.26.