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November 09, 2012 to Acquire Kayak for $1.8B

By Rory Lidstone, TMCnet Contributing Writer Incorporated today signed a definitive agreement to acquire rival travel booking site Kayak in a stock and cash transaction. The valuation stated in the agreement for Kayak is $1.8 billion or $40 per share, which Priceline will pay $500 million in cash with the rest in equity and assumed stock options.

The boards of directors of both companies unanimously approved of the transaction, which still has customary closing conditions to meet, including a vote of Kayak's shareholders and regulatory approvals. As such, the agreement isn't expected to close until toward the end of the first quarter of 2013.

Kayak will retain its current managing team after the acquisition and it will work independently as part of Priceline.

Kayak is a popular travel research site that makes it easy to compare hundreds of travel sites at once when searching for flights, hotels and rental cars, helping travelers find the best fit for their needs and the best price. The company typically processes somewhere over 100 million user queries each month via its global websites and mobile apps.

"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 Priceline Group president and chief executive officer Jeffery H. Boyd. "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."

Last month, Boyd assumed the additional role of chairman of the board for Priceline, effective as of January 1, 2013. The previous chairman, Ralph M. Bahna, is to retire from the role of chairman at that time and will retire from the board entirely as of June 2013.

Kayak's board of directors is currently under investigation by Newman Ferrara LLP over the Priceline acquisition to ensure that it is acting in the best interests of Kayak's stockholders.

Edited by Braden Becker
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