Acquisitions

Kayak, That Travel Site You Love, to Be Purchased for $1.8 B. by Captain Kirk’s Priceline

Priceline NEGOTIATED!

 Kayak, That Travel Site You Love, to Be Purchased for $1.8 B. by Captain Kirks Priceline

This guy used to be a fucking STARFLEET Captain! [Photo: WJYY)

Kayak, your favorite travel site, which easily serves up the cheapest flight and hotel prices across the web, has been acquired by fellow travel site Priceline, also known as “that thing William Shatner did after Star Trek.” According to a press release published by Skift, the two have entered into a definitive agreement for Priceline to acquire Kayak for $1.8 billion.

The release reads:

Priceline.com Incorporated (PCLN) announced today that it has signed a definitive agreement for the Priceline Group to acquire KAYAK in a stock and cash transaction.  Under the terms of the agreement, the transaction values KAYAK at $1.8 billion ($1.65 billion net of cash acquired) or $40 per share of KAYAK (subject to the collar described below), with the Group paying approximately $500 million of the consideration in cash and $1.3 billion in equity and assumed stock options.

The Boards of Directors of the Priceline Group and KAYAK have unanimously approved the transaction, which is subject to customary closing conditions, including a vote of KAYAK’s shareholders and regulatory approvals, and is expected to close by late 1st quarter 2013.  KAYAK’s current management team will continue to manage KAYAK’s operations independently as part of the Priceline Group of companies.  The Group expects that the impact of the KAYAK acquisition on Non-GAAP EPS in 2013 will be de minimis.

With both companies trading publicly, the announcement came minutes after the markets closed. Priceline’s stock closed at $627.87 today after falling 1.06 percent; Kayak fell 1.59 percent to $31.04.

The travel industry as a whole has seen 37 percent growth this year, though much of that occurred in early 2012. In October, Priceline led the charge on a “travel group rebound,” surpassing earnings forecasts.

Despite existing within the same industry, the two companies are strange bedfellows when it comes to their business models. Kayak aggregates travel prices from sites across the web to help users find the cheapest airfare and hotel rooms. Priceline, however, is built on an auction strategy, where users offer a bid for flights, hotels or car rentals and are immediately booked for that service if the business accepts their offer. The press release says Kayak will continue to operate independently of Priceline, but wouldn’t that mean Kayak could be driving customers to travel sites that are essentially Priceline competitors?

Meanwhile, some New York techies are already suggesting other travel site alternatives.

Follow Jessica Roy on Twitter or via RSS. jroy@observer.com