OpenTable just bought UK company TopTable.com for $55 million.
The stock is up 6% so far this morning.
OpenTable is a service for consumers who want to make reservations at restaurants. It makes its money selling its software to the restaurants.
Citigroup analyst Mark Mahaney likes the deal, which he says is consistent with OpenTable’s plans to grow internationally via acquisition.
“We believe this step will clearly accelerate OpenTable’s international expansion and pass to international profitability.”
Mark likes Open Table over all for four reasons:
- OPEN faces significant secular growth opportunity – still only single-digit % of U.S. restaurant reservations online
- Highly scalable model – 42% EBITDA margin in North America with 67% incremental; 3) A distinct Cyclical Recovery Play;
- A clear play off of Mobile Internet – 4MM+ Mobile reservations to date;
- One of Internet Small Cap’s best Managements.
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