Groupon could be interested in buying the San Francisco-based online review company Yelp Inc (NYSE: YELP), WSJ said, citing two people familiar with the situation.
Groupon and Yelp would be a logical matchup, and the combination of the two would create a company with earnings before interest, taxes, depreciation and amortization of $900 million to $1 billion, according to the publication.
Why It's Important
Groupon reported adjusted EBITDA of $47 million for its latest quarter, according to a July earnings release. Yelp’s adjusted EBITDA was $55 million at the end of June.
The Wall Street Journal quoted data from FactSet estimating that Groupon is valued at $1.71 billion, which is significantly less than the $16.5 billion it achieved in 2011, the year the company went public. Yelp is valued at $2.46 billion.
If a merger goes ahead, it would create a combined online marketplace in which merchants could offer deals to customers and read reviews while also making reservations and buying goods or services online.
Groupon shares were trading higher by 2.33% at $3.08 in Thursday's premarket session. Yelp shares were up 2.31% at $35.40.
Analyst Likes Groupon's Stock, With Or Without An Acquisition
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Photo courtesy of Groupon.
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