Grubhub just made its second major acquisition news this week, announcing that it has entered into an agreement to buy Yelp's food delivery business, Eat24.
Grubhub will pay $287.5 million for Eat24, the two companies announced Thursday afternoon. As part of the deal, Grubhub will get Yelp's Eat24 business and Yelp will integrate online ordering from Grubhub's 55,000 restaurants onto its platform.
Together, Grubhub and Eat24 will "form the largest network of restaurants offering online and mobile food ordering in the United States," the companies said, giving customers access to around 75,000 restaurants.
The deal expands Grubhub's lead in the food delivery space as it faces increasing completion from players like Amazon and Uber. And it beefs up Yelp's food offerings by letting customers tap into Grubhub's massive network of restaurant partners. The partnership has as an initial term of five years, and will be funded through a combination of cash and debt.
"Adding Eat24's large diner base and thousands of restaurants to our platform will accelerate Grubhub's mission to become the most comprehensive marketplace connecting takeout diners and restaurants," Matt Maloney, Grubhub's founder and CEO, said in a statement. "The long-term agreement ensures that Grubhub also has access to Yelp's enormous user base and clear content leadership to help drive more diners to our restaurants."
The news comes as Grubhub posted its latest earnings report Thursday, where it beat Wall Street estimates on revenue and was in-line on earnings per share.
The Yelp deal comes three days after Grubhub announced a deal with fellow Chicago tech company Groupon that will allow Groupon users to order food delivery from Grubhub restaurants. In the deal, Grubhub agreed to acquire part of OrderUp, a food delivery startup Groupon acquired in 2015, and Grubhub will now power food delivery for the company’s Groupon To Go markets.
