Priceline Group Acquired Momodo for $550m

0
67
priceline group

Priceline Group NASDAQ: PCLN

Priceline Group signed a deal to acquire Europe-based meta search site Momondo Group for $550m in cash. Talks began last Fall.

The Priceline Group made the acquisition, subject to regulatory approvals, but the Momondo Group will combine with Kayak.  The $550m in cash does not appear pricey given Priceline’s buyout of OpenTable for over $2.5b in 2014. But the current deal tops the list of the deals since then.

Priceline Group made the deal despite Momondo’s glaring weakness.

“The overriding weakness is that Momondo developmentally has not been leading after the company’s great developer brain, founding CEO Thorvald Stigsen left in 2014, in the same way that Kayak lost Paul English as CTO. It is not easy to replace the great personalities that drive technological development.”

Priceline plans to take its first steps toward integration soon. Kayak co-founder and CEO Steve Hafner, said the deal will assist his company in the Nordics and UK. Hafner wants to put all three companies on a single backend tech platform. Plus, all three share similar cultures. Furthermore, the company can scale in Europe.

But rivals made moves in the interim. Expedia’s Trivago started an IPO offering two months ago. Google moved into the space. The internet search giant offers flight info and hotel meta search features.

Some time ago, Skift speculated that Airbnb might buy Momondo.

“Momondo, the darling of metasearch, likely has the best consumer brand positioning in Europe at the moment,” Bujarski says. “They’ve succeeded in the Nordic markets, and carry a certain brand heft as a result. On the other hand, Kayak has struggled to gain traction in Europe. Interest in Momondo could preempt a move from the likes of an Airbnb or the Chinese, for instance.”

And more industry mergers will occur.

“My prediction is that many of the smaller search engines, including Momondo, will be consolidated since Google now has clearly launched in the U.S. and is investing heavily in travel both with Google Flights and with Google Trips, and not in the least by taking care of the travelers when they arrive at the destination.”

Kayak looked for a metasearch acquisition in Europe, per a report in early January. Kayak, a part of the Priceline Group, discussed a potential deal with Momondo Group. No one knew the depth of the talks. But companies talk to several companies about deals from time-to-time. For example, Skift speculated that Kayak considered buying Skyscanner before China’s Ctrip bought it.

Priceline Group Did Not Deny Deal Months Ago

Momondo Group CEO Hugo Burge declined to comment on any potential deals. Kayak officials told Skift:

“We don’t have a deal to buy anyone but we’re all ears to anyone who wants to sell at a reasonable price. Unfortunately, Ctrip/Skyscanner and Trivago seem to have inflated expectations. Obviously I can’t speak for any of the potential sellers that you mention. Maybe someone else is on the hunt?”

This was not a denial. But it was not confirmation either. At the time, some smaller companies could become potential buyouts.

Source: Skift

You may also like this article about Payless planning to close 1000 stores!

LEAVE A REPLY

Please enter your comment!
Please enter your name here