Priceline Acquires Kayak For $1.8 Billion

Priceline.com Inc. has purchased Kayak Software Corp. for $1.8 billion. The deal includes both cash and stock options. The deal arrives less than four months after Kayak became a publicly traded company.

Priceline’s Board of Executives will pay $40 per share for Kayak, a 29 percent premium over the company’s closing price of $31.04. The $40 buy price is also 54 percent higher than the company’s July IPO pricing of $26 per share.

According to Priceline chief executive officer Jeffery Boyd, the Kayak deal will be most helpful in the mobile market:

“They have a great shop up in the Boston area, and we are very excited to be working with their engineers.”

Priceline will use its international reach to help grow the Kayak brand in the international market. Priceline also plans to bring hotel listings to the price comparison travel platform.

Last year Kayak reported $224 million in revenues with 302 million user queries completed in the quarter ending in September. Queries increased by 31 percent year-over-year.

Priceline is no stranger to purchasing popular portals for expansion purposes. Priceline purchased Dutch hotel booking website Booking.com in 2004 and, since that time, has generated 80 percent of its gross booking revenues from outside of the United States.

Priceline currently employs 3,400 workers and took in $4.3 billion in revenue in 2011.

The online travel market is a crowded space with companies relying on the best possible technology to deliver deep discounts to travelers. With Kayak’s technology and Priceline’s know-how, we could soon find ourselves with better discounts that are delivered seamlessly to our PCs, tablets, and smartphones.