Expedia Inc. (EXPE) agreed to buy a majority stake in travel
metasearch engine trivago for about EUR477 million, expanding the
Internet travel agent's exposure in Europe.
The deal also increases consolidation in Expedia's market
following priceline.com Inc.'s (PCLN) $1.8 billion purchase
agreement for travel metasearch company Kayak Software Corp. (KYAK)
last month.
Expedia will acquire 61.6% of trivago for about EUR477 million,
or roughly $632 million--including EUR434 million in cash and EUR43
million in Expedia stock.
Founded seven years ago, trivago grew into one of the largest
travel sites in Europe and now conducts more than 100 million hotel
searches annually, Expedia said. The company is expected to deliver
about EUR100 million in revenue for 2012.
After the deal closes, the trivago co-founders and management
team will continue to operate independently based out of trivago's
headquarters in Dusseldorf, Germany.
Expedia said the deal, expected to close in the first half of
next year, will benefit its 2013 adjusted per-share earnings.
After four years of investment that often weighed down profit,
Expedia is in the final stages of redeveloping its technology, now
with all its hotel products on a central platform. Expedia's
namesake brand was the last to move onto the new technology, and it
appears to be keeping up with other brands after underperforming
for a while.
In October, the company reported better-than-expected results
driven by improvement in its technology-enhanced hotel
business.
Shares were down 2% at $59.69 amid a broad market decline. The
stock has more than doubled since the start of the year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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