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GrubHub shares soar on news of a takeover of LevelUp

The US$390mln deal to buy LevelUp came as Grubhub reported strong second-quarter results

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GrubHub boasts relationships with more than 85,000 restaurants across 1,600 US cities

Investors feasted on GrubHub Inc (NYSE:GRUB) shares Wednesday after the online food delivery group unveiled an acquisition as well as second-quarter earnings that zipped past Wall Street’s estimates.

The announcement of a US$390m all-cash takeover of the Boston-based mobile food ordering group LevelUp will rachet up its volume of orders and allow for more tie-ups between restaurants and the aptly-named GrubHub.

The news was cheered by investors who sent GrubHub shares climbing nearly 23.4% to US$134.57 in afternoon trade.

“LevelUp’s leading restaurant-facing technology and the team they have built in Boston will help GrubHub to provide the most comprehensive solution for restaurants, powering everything from online demand generation to fulfillment for restaurants,” said Matt Maloney, GrubHub’s CEO in a statement.

The deal came as GrubHub reported that its net income jumped to US$30.1mln or 33 cents per share, up from US$14.8mln or 17 cents per share in the year-ago quarter. On an adjusted basis, GrubHub earned 50 cents per share, which whizzed past the consensus projection of 42 cents per share.

Revenue, meanwhile, swung to US$239.7mln in the quarter, trouncing Wall Street’s estimate of US$233mln.

Its active diners in the quarter climbed to 15.6 million, which represents a 70% increase from the 9.2 million diners the company reported in the year-ago quarter.

GrubHub boasts relationships with more than 85,000 restaurants across 1,600 US cities. Its array of brands include GrubHub, Seamless, Eat24 and MenuPages.

--Updates share price--

Contact Ellen Kelleher at [email protected]

Quick facts: GrubHub Inc

Price: 71.04 USD

NYSE:GRUB
Market: NYSE
Market Cap: $6.59 billion
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