Skift Take
This is a great move by Expedia as Trivago is a leader across a wide swath of European countries, and this could make Kayak's quest for European expansion a bit more difficult.
It didn't take Expedia long to answer Priceline's pending acquisition of Kayak as Expedia agreed to take a majority stake in leading German travel metasearch site Trivago in a cash and stock deal worth $632 million.
Founded in 2005, Dusseldorf, Germany-based Trivago has a strong presence in hotel metasearch in Germany, Spain, the UK, Italy and France, and has recently entered the U.S. market.
Expedia has signed a definitive agreement to take a 62 % stake in Trivago, which expects to take in $132 million in net revenue in 2012.
Under the terms of the agreement, as outlined in an SEC filing, three members of Trivago's management will retain 36% of the outstanding shares, and two other employees will keep 2% of the outstanding securities after the acquisition closes.
Expedia agrees to pay $426.4 million in cash, and make five payments of Expedia common stock, valued at $42.6 million, on the anniversary of the acquisition over five years. Trivago will also issue new shares, and Expedia will pay another $7.6 million for shares Trivago is issuing to Expedia.
"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 through a culture focused on developing great products, building a strong brand and promoting partners' businesses. These attributes closely align with our Expedia, Inc. strategy and values and we are thrilled to have them join our portfolio," said Dara Khosrowshahi, Expedia's CEO.
Trivago raised about $1.2 million in 2008 from Howzat Media, an investment fund spearheaded by Hugo Burge and David Soskin, both of whom formerly led travel deals site Cheapflights.
Expedia's deal with Trivago, which would close in the first half of 2013, pending regulatory approvals in Europe, comes as Priceline agreed to acquire Kayak with an eye on boosting Kayak's international expansion.
Trivago has a much stronger foothold in Europe than Kayak, which owns metasearch site Swoodoo in Germany.
An Expedia co
