by Christopher Freeburn | November 9, 2012 9:58 am
Priceline (NASDAQ:PCLN) announced on Friday that it will acquire Kayak Software (NASDAQ:KYAK) in a deal valued at $1.8 billion.
Under the terms, Priceline will pay about $500 million in cash and $1.3 billion in stock for Kayak, the Associated Press noted.
Predictably, Kayak shares jumped more than 26% to just under $40 in Friday morning trading, while Priceline shares dipped more than 1%.
Kayak’s shares began public trading just four months ago, after postponing its IPO for over a year. Yesterday, the company said it earned $7.2 million during the third quarter, up from $4 million in the same period last year. EPS came in at 26 cents, beating the 19 cents Wall Street was expecting. Revenue jumped 29% over last year, hitting $78.6 million.
Kayak, which was created by executives behind online travel giants Orbitz (NYSE:OWW) and Expedia (NASDAQ:EXPE), produces software that compares various online travel offers, directing consumers to travel websites offering deals matching their itineraries, collecting both advertising revenue and referral fees.
The acquisition will be finalized early next year, assuming Kayak shareholders and regulators agree.
In April, Barron’s named Priceline CEO Jeffrey Boyd as one of the top 30 CEOs delivering high value for shareholders, customers and employees.
Source URL: http://investorplace.com/2012/11/priceline-to-buy-kayak-for-1-8b/
Short URL: http://invstplc.com/1nHX8nl
Copyright ©2014 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.