NORWALK, Conn. (AP) — The Priceline Negotiator lives after all. The company has struck a deal to buy Kayak Software Corp. for $1.8 billion in a move to expand its online travel business.
The cash-and-stock deal values Kayak at $40 a share, a 29 percent premium over its closing price Thursday. Shares of Kayak — which just went public in July — soared in after-hours trading.
Kayak allows users to compare hundreds of travel sites when looking for flights, hotels and rental cars. It sends the consumer to other websites to complete their purchases and earns fees on those referrals, although some bookings can be made directly on Kayak's website and mobile applications. It also sells advertising.
Kayak was created by the same executives who helped launch other travel sites including Expedia, Travelocity and Orbitz. The Norwalk, Conn., company went public in July after delaying its offering more than a year while it waited for the market to strengthen.
The strategy of waiting seemed to work — the shares jumped 28 percent on the first day of trading and recently peaked at $37. But Priceline.com Inc. will pay 57 percent more than Kayak's IPO price. The deal includes about $500 million in cash and $1.3 billion in stock and assumed options.
The deal needs the approval of Kayak's shareholders and of regulators. It is expected to close in the first quarter of next year.