Priceline flies into the restaurant business with $2.6 billion OpenTable deal
Priceline is snapping up restaurant-reservation platform OpenTable for $2.6 billion in cash, expanding the traditionally travel-only booking site’s services.
Priceline (PCLN) will pay $103 a share for the company, a 45% premium to OpenTable’s (OPEN) $71.13 closing price Thursday, the company announced Friday. The deal should be completed in the third quarter.
“They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience,” said Darren Huston, CEO of the Priceline Group. “We look forward to helping the OpenTable team accelerate their global expansion.”
The famous face behind Priceline’s promotions, William Shatner, also piped up to welcome the new addition:
— William Shatner (@WilliamShatner) June 13, 2014
The online travel site has been buying its way to growth over the past decade, acquiring rivals Booking.com and Kayak.com. This latest purchase will help the company go beyond cars, hotels, and air flights. OpenTable brings with it nearly 15 million people who book reservations across 31,000 restaurants on its platform each month.
There’s “a lot of green space in international” for OpenTable, Huston said on a call with analysts Friday morning. This room for growth is part of the reasoning behind the healthy price premium, he said.
Currently, the restaurant booking operates in six countries, including the U.S. Priceline plans to use its infrastructure to expand OpenTable’s services globally and cross-market it with its existing booking customers.
“It’s critical to understand it’s the same customers, travelers are diners,” said Huston. “This is another leg of the stool for the Priceline Group.”
OpenTable, which is the leading global dining reservation platform, will continue to be headquartered in San Francisco and will operate as an independent business with its current management team under the Priceline Group umbrella of companies.
Shares of other online platforms gained sharply in pre-market trading on the news, including Groupon (GRPN), Yelp (YELP), and Grubhub (GRUB).