Multiples in GRUB’s EAT24 acquisition

Here is my quick analysis of Grubhub’s EAT24 acquisition.

Yelp reports EAT24 revenues in transaction revenues. This revenue bucket is largely EAT24 so assuming 90% of Transaction revenue is EAT24, I estimated this number at $65 million ( 90% x $18million a quarter). Which gives us 4X revenue multiple for this acquisition.

Now Grub’s ebitda margin are ~26%, so assuming same margins for EAT24. EBITDA for EAT24 come out to be $17 million. i.e 16.8X multiple at current ebitda levels. This seems really high so I assume alot of growth has been baked in.