US online travel company Priceline.com Inc (NASDAQ:PCLN) unveiled a definifive cash and stock deal worth USD1.8bn (EUR1.4bn) to buy domestic online travel search services provider KAYAK Software Corp.
The transaction, valuing KAYAK at USD40.00 a share, will be financed with USD500m of cash and USD1.3bn in equity and assumed stock options, the buyer said.
Priceline Group’s president and CEO Jeffery H Boyd welcomed the agreement, pointing out KAYAK’s strong brand and its track record of profitable growth. Priceline aims to support the firm’s plans to build a global online travel brand, Boyd added.
Through its global websites and mobile applications, KAYAK enables search for flights, hotels and rental cars by allowing comparison between hundreds of travel sites at once, giving travelers choices on where to book.
It processes more than 100m user queries monthly.
Steve Hafner, its CEO and co-founder alongside Paul English, said in a comment that Priceline Group’s global reach and expertise would help speed up KAYAK’s growth, while supporting its future development as a company.
The deal has secured the unanimous approval of both companies’ boards and needs to obtain clearance from KAYAK’s shareholders and regulators in order to complete. It is expected to wrap up late in the first quarter of 2013.
Following completion, KAYAK will continue to be managed by its current team as an independent entity within the Priceline Group of companies.