Online travel agency Priceline.com Inc (PCLN: Quote) said Thursday that it has agreed to buy Kayak Software Corp (KYAK: Quote) in a $1.8 billion cash and stock deal.
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.
The deal values Kayak at $40 per share, a 29% premium to the company's Thursday closing stock price and 54% higher than its IPO price.
Priceline will pay about $500 million of the consideration in cash and $1.3 billion in equity and assumed stock options.
The boards of directors of both the companies have unanimously approved the deal, which is expected to close by late first quarter of 2013.
Kayak's current management team will continue to manage its operations independently as part of the Priceline Group of companies.
Priceline expects that the impact of the acquisition on its adjusted earnings per share in 2013 will be de minimis.
"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 President and Chief Executive Officer Jeffery Boyd.
Steve Hafner, Kayak CEO and Cofounder, 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 also on Thursday reported third quarter profit that increased 14% from last year, as it processed more user queries across its websites and mobile applications.
Kayak shares are currently gaining 26.84% in after hours trading after closing the day's regular trading session at $31.04, down 50 cents or 1.59%.
Priceline shares, which have traded in a range of $438.76 to $774.96 over the past year, closed Thursday's regular trading session at $627.87, down $6.74 or 1.06%, and lost an additional $13.87 or 2.21% in after hours trading.
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by RTT Staff Writer
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