Expedia Buys Majority Stake in German Travel Company for $632M
Expedia has agreed to acquire a 62 percent stake in seven-year-old Trivago for $632 million, in a deal that includes mostly cash and some stock.
“The trivago team built one of the largest, fastest growing and most well known travel sites in Europe conducting more than 100 million hotel searches annually,” said Dara Khosrowshahi, Expedia’s President and CEO, in a release.
Investors have been eager for Expedia to expand internationally, especially since the strategy has worked so well for Priceline, which owns Booking.com in Europe and Agoda.com in Asia. This acquisition could help check that box; however, this morning, Expedia’s shares are trading lower, falling two percent to $59.44 a share.
Trivago is a search company, like Kayak in the U.S. (recently purchased by Priceline). It compares more than 600,000 hotels across 140 booking sites in more than 30 countries and 23 languages. Expedia said it expects Trivago, which is on track to record close to $132 million in revenue this year, to be accretive to adjusted earnings per share in 2013.
Pending regulatory approvala, the acquisition is expected to close in the first half of next year. Expedia said Trivago’s co-founders and its management team will operate independently at its headquarters in Dusseldorf, Germany.