Contact: Scott Denne
Online food delivery services company Seamless North America had the size and the growth for a solid public offering of its own, and by acquiring (and taking the name and CEO of) its closest competitor, GrubHub, the company improved both of those attributes. The new GrubHub wasted no time pushing itself out to public markets. It filed for a public offering just four months after closing the merger and made its filing public last week.
Seamless itself posted $111m in 2013 revenue, up 35% from a year earlier and coming off a year of 36% revenue growth. Wall Street would likely have rewarded that high, consistent growth rate. Instead, Seamless added to that, handing over about 43% of its stock in August to pick up GrubHub, which, independent of Seamless, grew revenue 62% to $59m last year.
Pairing up didn’t hurt profits. Despite a $24m loss in 2012 from the original GrubHub, the combined company (Seamless alone through August 8, 2013, and combined results afterward) made a profit in each of the past three years and every quarter during the past two years, including $3.6m in combined net income on $84m in revenue during the two recent quarters, which mixes results between the two businesses.
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