Tech: Yelp's stock is skyrocketing on the news that it's selling Eat24 for $287.5 million to Grubhub (YELP, GRUB)
Yelp said it is selling Eat24 to Grubhub for $287.5 million in an all cash deal.
Yelp is selling its Eat24 food delivery service to Grubhub for $287.5 million in cash, the company announced today.
Yelp shares are up 19% in after hours trading on the news. Shares of Grubhub were up 1.6%.
Yelp and Grubhub will enter into a "long-term strategic partnership" as part of the deal, in which Yelp will integrate online ordering from Grubhub restaurants into its platform.
The deal, which Yelp disclosed in its Q2 earnings announcement on Thursday, is subject to closing conditions, including antitrust approval. Under the terms of the deal, Yelp is entitled to a $15 million termination fee if the acquisiton does not close by November due to antitrust conditions.
Yelp, an online reviews site, acquired Eat24 in February 2015 for $134 million.
The planned sale of Eat24, along with a $200 million buyback program announced on Thursday, were cheered on Wall Street, re-invigorating Yelp's stock, which finished Thursday's regular session down 28% from its 52-week high.
In an online presentationp published on Yelp's site with its Q2 results, the company said the Grubhub partnership would "nearly double the online food ordering options" on Yelp.
In the three months ended June 30, Yelp's net revenue grew 20% year-over-year to $208.9 million. The company earned $7.6 million in net income, or 9 cents per share.
Yelp also announced a $200 million share buyback program on Thursday.