There’s definitely an appetite for acquisitions – Priceline buying Open Table last month and now Expedia Inc has weighed in with news that it’s buying Wotif.com.
The Australia-based online travel company has had a couple of challenging years on the homefront but particularly so in Asia where it has struggled to fully realise the potential of its investments in Asia Web Direct. For Expedia, this is a time when the company is investing big in Asia Pacific, both through its joint venture with AirAsia which turned three this week, as well as its other investments in the region, namely eLong in China, and this acquisition makes sense if it’s intent on growing its presence in the region.
This morning, it announced it’s entered into an agreement to acquire the Australia-based online travel company for a total cash consideration of A$703 million or A$3.30 per share.
According to the press release, that’s a premium of approximately 30% to Wotif Group’s volume weighted average share price for the five trading days leading up to and including July 4, 2014 (equivalent to US$658 million or US$3.09 per share based on July 4, 2014 exchange rates).
Dara Khosrowshahi: Stronger position in APAC
“Wotif Group is well positioned in the Asia-Pacific region with a portfolio of leading travel brands,” said Dara Khosrowshahi, President and Chief Executive Officer, Expedia, Inc.
“This acquisition will allow both companies to continue driving growth opportunities by leveraging the unique strengths each brings to the table. Wotif Group will add to our collection of travel’s most trusted brands and enhance our Asia-Pacific supply, while Expedia will expose Wotif Group’s customers to our extensive global supply and world-class technology.”
The Wotif Group operates brands including Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology.
Wotif Group recorded A$593 million in gross bookings (total transaction value) and A$76 million in revenue, in addition to generating 3.2 million room nights, during the six months ended December 31, 2013. Its multi-product portfolio focuses primarily on hotel and air, offering consumers more than 29,000 bookable properties in destinations around the world.
“Joining Expedia allows us to rapidly advance two of our strategic initiatives – strengthening offshore supply and improving our customer and supplier value propositions through enhanced technology,” said Scott Blume, Managing Director and Chief Executive Officer of Wotif Group.
Scott Blume: Help to grow.
“We believe this will help solidify our position as the premier travel brand in Australia and New Zealand, grow our business across the Asia-Pacific region and increase our exposure and brand awareness to inbound international travellers,” added Blume.
The completion of the acquisition is subject to approval by the shareholders of Wotif.com Holdings Limited and other customary closing conditions, including applicable regulatory approvals. Subject to receipt of such approvals, the transaction is expected to close during the fourth quarter of 2014.
