Priceline (PCLN) is adding more to its table. The online travel giant will buy restaurant booking service OpenTable (OPEN) for $2.6 billion in cash, or $103 a share. It's a 46% premium to the stock's closing price on Thursday of $70.43.
Yahoo Finance Breakout Host Jeff Macke believes that Priceline overpaid for OpenTable. The price is almost a billion dollars more than OpenTable's market cap (as of Thursday's close), he said.
OpenTable's revenue was $190 million in 2013 and profit was $33.4 million. Revenue is expected to be more than $225 million in 2014 and more than $262 million in 2015 according to Thomson Reuters.
The deal will help Priceline broaden its reach outside the world of travel booking. Priceline has been growing its business through acquisitions over the years. The company's brands include Booking.com, Kayak and rentalcars.com
Yahoo Finance Columnist Rick Newman said its hard to tell what kind of synergy the two companies will have, but it does give Priceline access to more customers.
OpenTable seats more than 15 million diners per month at more than 31,000 restaurants. The company allows customers to book restaurant reservations online in exchange for monthly fees from restaurants
Priceline President and CEO Darren Huston said in a statement that OpenTable gives it "a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers."
The deal is expected to be completed in the third quarter of this year.
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