American Express just announced two acquisitions: find out more

on Jun 21, 2024
  • American Express is buying Tock from Squarespace for about $400 million.
  • The financial technology company has also agreed to acquire Rooam.
  • American Express stock is currently up more than 25% versus its YTD low.

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American Express Company (NYSE: AXP) is in focus this morning after announcing two new acquisitions. 

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Shares of the credit card company have gained more than 25% since their year-to-date low in mid-January. 

American Express to acquire Tock

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AMEX is buying Tock – a Chicago-based provider of reservation, table, and event management technology for about $400 million. 

The financial technology company is taking over Tock from Squarespace that acquired it in 2021. Matthew Tucker – the head of Tock said in a press release today:

We believe that as part of American Express, Tock will deliver enhanced value to our customers through access to a broad network of diners.

Tock currently serves a total of some 7,000 bookable venues, including wineries and restaurants. American Express stock currently pays a dividend yield of 1.22%.

AMEX is buying Rooam

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On Friday, American Express also signed an agreement to buy Rooam – a tech specialist within the hospitality industry. 

The fintech giant did not reveal financial details of the aforementioned acquisition. Howard Grosfield – the president of U.S. Consumer Services at AMEX said in a press release today:

We will [now] be able to offer restaurants the tools to deliver more personalised hospitality, facilitate prepaid experiences like tasting menus, and provide more convenient way for customers to pay the bill.

American Express is convinced that the Rooam acquisition will help strengthen its footprint in mobile ordering and payment capabilities. In April, the New York listed firm reported an 11% annualised growth in revenue for its first financial quarter. 

AXP has upside to $265

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Note that American Express and Squarespace also agreed to collaborate on offering additional benefits to small businesses on Friday. Such a partnership will leverage card member benefits and the Amex Offers programme. 

The news arrives only days after Sanjay Sakhrani – a KBW analyst reiterated his “buy” rating on American Express shares that he expects will hit $265 within the next twelve months. His price objective indicates potential for about a 15% gain from here. 

Sakhrani remains bullish on $AXP following its strong guidance for 2024. AMEX forecasts up to an 11% year-on-year growth in revenue on $12.65 to $13.15 of per-share earnings this year. Stephen J. Squeri – its chief executive said in April:

We have started 2024 off strong. Our continued investments in our value propositions, marketing, brand and technology capabilities have helped drive high levels of engagement with our premium customers. We continue to attract high-spending, high credit-quality customers to the franchise, with new card acquisitions accelerating sequentially to 3.4 million in the quarter.

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