Norwalk-based Priceline to buy Norwalk-based Kayak for $1.8 billion

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Steve Hafner, CEO and co-founder of Kayak.com. File photo Stamford

The two travel pricing internet companies announced Thursday that Priceline will acquire Kayak for $1.8 billion in cash and stock offering.

Kayak went public in July and was founded in Norwalk about 8 years ago. The group that started the Kayak had deep experience at other travel websites and tech companies.

Steve Hafner, Kayak co-founder and CEO, was vice president of consumer travel at Orbitz, which he helped found in 1999. Terry Jones, Kayak’s chairman of the board, helped found Travelocity.com and served as its president and chief executive officer. Paul English, Kayak’s co-founder and chief technology officer, was a vice president of technology at Intuit Inc.

Here’s some of the official release from Kayak.

Priceline Group Acquisition of KAYAK

“Paul English and I started KAYAK eight years ago to create the best place to plan and book travel,” said Steve Hafner, KAYAK Chief Executive Officer and Cofounder. “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 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 Group President and Chief Executive Officer Jeffery H. Boyd. “KAYAK also has world class technology and a tradition of innovation in building great user interfaces across multiple platforms and devices. We believe we can be helpful with KAYAK’s plans to build a global online travel brand.”

The board of directors of both companies approved the transaction, which is subject to KAYAK shareholder approval, customary closing conditions and regulatory approval. Until the transaction is closed, both companies will continue to operate independently.

Third Quarter 2012 Financial Results

In light of today’s announcement, the previously scheduled conference call to discuss third quarter 2012 financial results has been canceled.

“We generated record revenue and profits,” said Steve Hafner, KAYAK Chief Executive Officer and Cofounder. “Our investments in product development, marketing, geographic expansion and mobile applications are paying off.”

  • Revenue: $78.6 million, a 29% increase from $61.2 million in the third quarter of 2011.
  • Adjusted EBITDA: $21.1 million, a 19% increase from $17.7 million in the third quarter of 2011.
  • Net Income: $8.0 million, a 14% increase from $7.0 million in the third quarter of 2011.
  • EPS: Both GAAP and non-GAAP EPS for the third quarter of 2012 include 5.0 million additional shares compared to same period in 2011. EPS is calculated based on GAAP and non-GAAP net income divided by 42.7 million weighted average diluted shares outstanding for the third quarter of 2012 and 37.7 million weighted average diluted shares outstanding for the same period in 2011.
  • GAAP EPS: $0.19, as compared to $0.18 in the third quarter of 2011.
  • Non-GAAP EPS: $0.26, as compared to $0.26 in the third quarter of 2011. Non-GAAP earnings-per-share excludes $4.1 million in stock based compensation and $1.4 million of amortization of intangibles.
Rob Varnon

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