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Expedia (EXPE) To Buy 61.6 Pct Stake In German Travel Site Trivago For $632M

 December 21, 2012 12:28 PM
 


(By Balaseshan) Expedia Inc. (NASDAQ: EXPE), an online travel company, said it has agreed to buy a 61.6% equity position in Trivago, a hotel booking and metasearch company headquartered in Dusseldorf, Germany, for about $632 million.

Expedia expects the deal to be accretive to adjusted earnings per share in 2013. The total consideration of 477 million euros includes 434 million euros in cash as well as 43 million euros in Expedia common stock.

Founded seven years ago, Trivago is an online metasearch site which compares hotel rates from over 600,000 hotels on over 140 booking sites worldwide; while also offering over 34 million integrated hotel reviews, accompanied by 14 million photos.

[Related -Expedia Inc (NASDAQ:EXPE): A Look At Underappreciated Meta-Search Asset]

Through its primarily cost-per-click revenue model, Trivago profitably doubled revenue each year since 2008 and currently expects to deliver about 100 million euros in net revenue for 2012.

The deal is anticipated to close during the first half of 2013. Following the completion, the Trivago co-founders and management team will continue to operate independently based out of Trivago's headquarters in Dusseldorf, Germany.

Expedia provides travel agency services in the United States, the United Kingdom, Germany, Canada, France, Italy and the Netherlands via the Internet. The company offers airplane, hotel and car reservations, trip cancellation waivers and numerous smaller vacation and business travel services.

EXPE is trading down 2.11% at $59.62 on Friday. The stock has been trading between $27.93 and $62.80 for the past 52 weeks.

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