Following the acquisition of
) by online travel booking company
), its peers
) saw their share prices rise on chances of similar takeovers.
In fact, the M&A landscape looks bright this year with
strong corporate balance sheets, favorable credit markets, low
interest rates and strength in the stock market.
GrubHub's shares went up nearly 7% on Jun 13 and 2% in
after-hours trading. The provider of online and mobile platforms
for restaurant pick-up and delivery orders targets independent
restaurants, which account for 61.0% of all U.S. restaurants. Per
the company, Americans spent approximately $67.0 billion on
takeouts at these eateries and the amount is expected to increase
significantly driven by higher mobile engagement. Per S-1 filings,
the company generated revenues of $137.1 million in 2013, which
jumped 67.0% from 2012.
Moreover, GrubHub enjoys first-mover advantage in the online and
mobile delivery service market. The company's strong base of
restaurant partners helps it to counter intensifying
Another probable takeover target, Groupon, saw its share price
rise 3.9% to close at $6.24 on Jun 13. The company connects
consumers to merchants across the world by offering goods and
services at a discount. In the last reported quarter, Groupon
reported a positive earnings surprise of 42.9%, with revenues
increasing 26.0% year over year to $757.6 million.
Groupon is particularly strong in the mobile segment, deriving
50% of North America reservations (55% of total reservations) in
the last quarter from mobile devices. The company's policy of
launching new products regularly and the growing popularity are the
factors driving its growth.
We believe that innovation within a fast-growing segment,
increased use of mobile devices for local purchases and the
possibility of scaling up to better serve international markets
make Groupon and GrubHub interesting acquisition targets at
Currently, Priceline, GrubHub, Groupon and OpenTable have a
Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
PRICELINE.COM (PCLN): Free Stock Analysis
GROUPON INC (GRPN): Free Stock Analysis Report
OPENTABLE INC (OPEN): Free Stock Analysis
GRUBHUB INC (GRUB): Free Stock Analysis Report
To read this article on Zacks.com click here.