Priceline.com has announced its acquisition of Kayak – a similar site helping users search for flights, hotels and car hire deals when planning a trip – in a deal valued at US$1.8bn.
The Priceline Group provides online travel services in more than 180 countries and comprises 11 brands, including Booking.com, perhaps the world’s biggest hotel reservation site. The deal to buy Kayak amounts to US$500m in cash and US$1.3bn in equity and stock options.
“We’re excited to join the world’s premier online travel company,” said Kayak CEO and co-founder Steve Hafner. “The Priceline Group’s global reach and expertise will accelerate our growth and help us further develop as a company.”
While Priceline.com and Kayak are similar sites, Kayak offers users the ability to search hundreds of sites at once and features a cleaner user interface that is suited to the shift towards mobile-led design.
“Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers,” said Jeffery H Boyd, president and CEO of Priceline Group.
“Kayak also has world-class technology and a tradition of innovation in building great user interfaces across multiple platforms and devices. We believe we can be helpful with Kayak’s plans to build a global online travel brand.”
Kayak saw a successful IPO in July and its Q3 2012 earnings announced yesterday reported US$78.6m in revenue. The deal with Priceline.com values the company’s stock at US$40 per share – a jump up from the previous US$26 share price.
Kayak’s current management team will stay on to manage the site’s operations independently as part of the Priceline Group.
The deal has been approved by both company’s boards and is awaiting shareholder and regulatory approval. It is expected that the acquisition will be finalised late in the first quarter of 2013.
