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Seamless, GrubHub cook up plans to combine

GrubHub of Manhattan and Seamless North America of

GrubHub of Manhattan and Seamless North America of Chicago Monday, May 20, 2013, announced plans to merge and create a new company with more than 20,000 restaurants in 500 cities across the United States. Credit: Handout

Rival online takeout services Seamless North America and GrubHub announced plans Monday to combine and create a new company covering more than 20,000 restaurants in 500 cities across the United States.

Financial terms were not disclosed, and it's unclear what the combined unit will be called. GrubHub CEO Matt Maloney will become CEO, while Seamless CEO Jonathan Zabusky will serve as president, the companies said in a joint statement.

Brian McAndrews, an independent director on the Seamless board, will serve as chairman. Manhattan-based Seamless and Chicago-based GrubHub will have significant representation on the new board.

The combined company's name and marketing brands will be determined following regulatory approval, the companies said.

Online takeout ordering services work by contracting with restaurants, mostly in large metropolitan areas, to list themselves on the websites. Diners can search the menus, along with reviews posted by diners, to find the food they want and then order and pay online. In addition to websites, both companies also offer smartphone apps geared toward diners on the go.

"We are excited to combine the strengths of these two dynamic organizations in an industry that is rapidly gaining traction," Maloney said in a statement.

The services appeal to diners by eliminating the need for a kitchen drawer of takeout menus, while also helping them discover new pickup and delivery options in their neighborhoods. Restaurants can benefit from new business and don't have to deal with as many phone orders, which are labor intensive and prone to error.

Last year, orders through the two privately held companies totaled about $875 million in gross food sales, resulting in combined revenue of more than $100 million. They also aggressively vied with each other for market share.

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