Shares of Kayak Software Corp. (KYAK) gained more than 26 percent in extended trade Thursday after the company reported a 78 percent jump in third-quarter profit and said it has agreed to acquired by online travel company Priceline.com Inc. (PCLN) in a deal that values Kayak at $1.8 billion.
Kayak, which went public in July, is a travel research site that allows people to easily compare hundreds of travel sites at once when searching for flights, hotels and rental cars, and gives travelers choices on where to book.
Under the terms of the deal, Priceline.com will buy Kayak for $40 per share in cash and stock, paying about $500 million of the consideration in cash and $1.3 billion in equity and assumed stock options. The offer price represents a 29 percent premium to Kayak's Thursday closing stock price and is also 54 percent higher than its IPO price.
The board of directors of both companies have approved the transaction, which is subject to Kayak shareholder approval as well as other regulatory approvals. The transaction is expected to close by late first quarter of 2013. Until the transaction closes, both companies will continue to operate independently.
Steve Hafner, Chief Executive Officer and co-founder of Kayak said, "We're excited to join the world's premier online travel company. The Priceline Group's global reach and expertise will accelerate our growth and help us further develop as a company."
Kayak's third-quarter net income was $7.18 million or $0.19 per share, up from $4.03 million or $0.18 per share in the prior-year quarter.
Adjusted net income was $11.29 million or $0.26 per share, compared to $9.61 million or $0.26 per share in the same period last year, on higher number of shares outstanding in the latest quarter.
On average, analysts expected the company to earn $0.19 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter grew 29 percent to $78.60 million from $61.16 million in the year-ago period. Analysts had a consensus estimate of $77.36 million.
Kayak processed 302 million queries in the quarter across its websites and mobile applications, representing a 31 percent from the same period last year. Revenue per thousand queries or total RPM declined to $260 from $265 in the prior-year period due to increased mix of mobile queries.
The company's revenue from non-U.S. geographies grew 40 percent to $17.3 million.
KYAK closed Thursday's trading at $31.04, down $0.50 or 1.59 percent on a volume of 484,436 shares. However, in after-hours, the stock gained $8.32 or 26.80 percent to settle at $39.30.
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