Investing.com – the actions of Olo INC (NYSE: OLO) rose 11.6% on Thursday after the reports of Bloomberg News on Wednesday afternoon that indicated that the company is exploring an acquisition after receiving interest from possible buyers.
The deliberations are, as reported, in initial stages, mentioning companies such as Toast (NYSE: Tost) and Oracle Corporation (NYSE: ORCL) as possible buyers.
William Blair analyst Stephen Sheldon commented today about the rumors, saying that “he is not surprised” for the high interest of acquisition in the company given its “strong positioning with business clients (ended 2024 with 86,000 locations on its platform), its expansion towards the emerging business segment (that is, the average market), and the solid capabilities that it has continued to develop, especially with the solid capabilities, especially with the solid capabilities. SUITE ENGAGE AND THE EXPANSION TO THE PAYMENTS “.
However, the analyst also stressed that OLO has some “notable gaps” on his integral SAAS platforms, a solution that he thinks will prevail over time. He said Olo would need to make his own acquisition to fill those gaps or consider selling.
Among the possible OLO buyers, not mentioned in the Bloomberg report but highlighted by Sheldon, is Par Technology (Nyse: Par). “For par, it now has electronic commerce abilities through Menu, but OLO is clearly the leader on this front, so that combination could significantly help combined traction and the leading market position with business restaurants,” said the analyst.
The analyst also thinks that Toast could make sense. “Toast is also making a concerted effort to level up (recently won Applebee’s, which is its client with the highest number of locations to date with about 1,600 premises), so acquiring Olo would significantly expand its presence in the front and give it a large base on which to expand,” he said.
Sheldon added that Shift4 Payments (Nyse: Four) could also be a possible buyer, as well as Oracle, which has micros and was mentioned in Bloomberg’s article.
“In general, although a transaction is far from sure, we could see the potential strategic reasoning so that a variety of different actors seek to acquire Olo,” added the analyst.
The analyst has a neutral Market Perform rating on the action, but said he could quote a slightly higher multiple in case of an acquisition.
