Yelp shares soared 27% on Friday after announcing that it would be selling its Eat24 business to Grubhub for $287.5 million.
As part of the deal, both Yelp and Grubhub will enter into a five-year partnership that will integrate Eat24 into Grubhub’s food ordering platform.
According to Wedbush Securities analyst Aaron Turner, “The partnership expands the ability to monetize its restaurant traffic. The market is reflecting the potential.”
It was a good week for Yelp because next to this announcement, the company also reported better than expected second quarter revenue and announced a $200 million share repurchase program.
For the second quarter, Yelp reported revenue of $209 million. This was a 20% rise compared to the year ago period and higher than the $205 million that Wall Street expected.
Disclaimer: We have no position in GrubHub Inc. (NYSE: GRUB) nor Yelp Inc. (NYSE: YELP) and have not been compensated for this article.