IN BRIEF
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In a significant move to enhance its presence in the vacation rental market, Expedia has announced its plans to acquire HomeAway, Inc. This acquisition, valued at approximately $3.9 billion, will allow Expedia to incorporate HomeAway’s extensive portfolio of vacation rental brands into its offerings. By leveraging HomeAway’s expertise in vacation rentals and its impressive listing of over one million properties worldwide, Expedia aims to solidify its position in the thriving alternative accommodations sector.
In a bold move to strengthen its position in the ever-growing online travel market, Expedia, Inc. has announced its acquisition of HomeAway, Inc., a leader in the vacation rental space. Valued at approximately $3.9 billion, this strategic acquisition not only reflects Expedia’s commitment to enhancing its offerings in alternative accommodations but also represents a significant leap forward in capturing a larger share of the estimated $100 billion global vacation rental market.
The Deal Overview
On November 4, 2015, Expedia formally entered into a definitive agreement to acquire HomeAway and all of its brands. The acquisition will involve a combination of cash and Expedia common stock, equating to a per-share price of $38.31 based on Expedia’s closing share price the previous day. Each outstanding share of HomeAway common stock will be exchanged for $10.15 in cash and 0.2065 of a share of Expedia’s stock.
Unanimous Board Approval
Both companies’ Boards of Directors have unanimously applied their approval to this transaction, which is subject to standard closing conditions, such as regulatory approvals and the tender of the majority of HomeAway’s shares. The deal is set to close in the first quarter of 2016.
A Vision for Growth
This acquisition follows a successful two-year partnership during which Expedia has been keenly aware of the potential within the alternative accommodations market. Dara Khosrowshahi, CEO of Expedia, expressed strong confidence in this acquisition, stating, “Bringing HomeAway into the Expedia family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step.” Khosrowshahi emphasized the synergy between Expedia’s expertise in transactional platforms and the robust foundation established by HomeAway in vacation rentals.
Statements from HomeAway Leadership
Brian Sharples, CEO of HomeAway, highlighted the excitement within his company regarding this merger. He noted that as HomeAway evolves toward a fully online bookable marketplace, they are eager to leverage Expedia’s extensive distribution networks and technological expertise. This partnership is expected to enhance the overall experience for property owners, managers, and travelers alike.
Conference Call Announcement
To discuss the implications of this acquisition further, Expedia and HomeAway organized a conference call on the same day of the announcement. Interested parties could join the call through specified numbers, with options for both domestic and international callers. A live webcast was also made available to the public, reinforcing the companies’ commitment to transparency in communications.
The Bigger Picture
This acquisition is not just a financial maneuver but also a strategic alignment within the travel industry. With HomeAway’s portfolio, including popular sites like VRBO.com and VacationRentals.com, Expedia is positioned to appeal to a more diverse audience seeking unique travel experiences and accommodations. This aligns perfectly with the growing trend of travelers preferring vacation rentals over traditional hotels.
Expedia’s Expansive Reach
As one of the leading travel companies globally, Expedia boasts an impressive brand portfolio including Expedia.com, Hotels.com, and Hotwire, among others. Each of these platforms offers unique advantages to customers, contributing to the overall value proposition that Expedia brings to both leisure and business travelers.
The integration of HomeAway’s offerings will undoubtedly enhance Expedia’s capabilities, providing consumers with more choices and fostering deeper relationships with vacation property owners.
Looking Ahead
This acquisition reflects the broader trend in the travel industry toward consolidation, driven by the need to adapt to evolving consumer preferences. As Expedia prepares to integrate HomeAway into its operations, industry observers will be keenly watching to see how this affects competition within the vacation rental segment.
For further details on the acquisition, you can check the official announcements at PR Newswire or read more about it at Yahoo Finance.
Comparison of Expedia and HomeAway Post-Acquisition
| Feature | Description |
| Acquisition Value | $3.9 Billion in cash and stock |
| HomeAway’s Reach | Over 1 million vacation rental listings in 190 countries |
| Integration Goals | Shift from classified marketplace to transactional model |
| Key Brands | HomeAway, VRBO, VacationRentals |
| Market Size Focus | Targeting the $100 billion alternative accommodations market |
| Projected Benefits | Enhanced consumer experience and accelerated growth |
| CEO Statements | Both leaders express excitement for the future of the combined companies |
Expedia today announced its plans to enhance its presence in the vacation rental market by acquiring HomeAway, Inc., a global leader in vacation rentals. This strategic acquisition, valued at approximately $3.9 billion, including cash and common stock, will allow Expedia to capitalize on the fast-growing alternative accommodations sector.
The Deal Breakdown
Under the terms of the agreement, Expedia will offer to acquire each outstanding share of HomeAway’s common stock, estimating a per-share price of $38.31. HomeAway shareholders will receive $10.15 in cash along with 0.2065 of a share of Expedia common stock. This significant move is designed to fortify Expedia’s position as a leading travel marketplace.
Strategic Importance
According to Dara Khosrowshahi, CEO of Expedia, acquiring HomeAway contributes to their long-term strategy focusing on the growing $100 billion alternative accommodations market. This acquisition not only enhances Expedia’s portfolio but allows the company to leverage its expertise in transforming HomeAway’s operations from a classified marketplace to a transactional one.
Integration and Growth Potential
Brian Sharples, CEO of HomeAway, expressed excitement about joining forces with Expedia, highlighting the potential benefits of integrating their technology and distribution capabilities. With a combined portfolio featuring over 1.2 million properties, this partnership is set to transform the vacation rental experience for travelers and property owners alike.
Regulatory Approval and Future Expectations
The deal has been unanimously approved by the Boards of Directors of both companies and is subject to regulatory approvals and the tender of a majority of HomeAway shares. Both Expedia and HomeAway anticipate closing the transaction in the first quarter of 2016.
Upcoming Conference Call
To discuss the acquisition, Expedia and HomeAway will host a conference call on November 4, 2015, where they will delve into strategic insights and respond to inquiries from investors and media. Stakeholders are encouraged to participate and gain a detailed understanding of the implications of this significant transaction.
About Expedia, Inc. and HomeAway, Inc.
Expedia is a powerhouse in the travel industry, known for its vast array of online travel services, while HomeAway stands as a pioneer in vacation rentals, boasting a robust portfolio of property listings across multiple countries. Together, they aim to create unparalleled value in both leisure and business travel, catering to a diverse audience of consumers.
Highlights of Expedia’s Acquisition of HomeAway, Inc.
- Acquisition Value: Approximately $3.9 billion in cash and stock.
- Transaction Approval: Unanimously approved by both companies’ Boards.
- Total Shares Offered: $10.15 in cash plus 0.2065 Expedia shares per HomeAway share.
- Industry Focus: Expanding presence in the $100 billion alternative accommodations market.
- HomeAway’s Market Leadership: Over 1.2 million vacation rental properties available worldwide.
- Integration Plans: Aiming to shift HomeAway to a fully online, transactional model.
- Regulatory Approvals: Transaction subject to customary closing conditions and regulatory approvals.
- Expected Closure: Anticipated to complete in the first quarter of 2016.
Expedia’s Strategic Move
Expedia, Inc. has made a bold decision to enhance its offerings by acquiring HomeAway, Inc., a prominent player in the vacation rental market. This move is valued at approximately $3.9 billion and includes a mix of cash and stock option, allowing Expedia to integrate HomeAway’s well-established platform and extensive portfolio of vacation rental properties into its business. This acquisition positions Expedia to tap into the booming alternative accommodations sector, which is estimated to be worth around $100 billion.
Understanding the Vacation Rental Market
The vacation rental market has been experiencing substantial growth, driven by changing consumer preferences. Travelers are increasingly seeking unique lodging experiences that offer greater flexibility and value compared to traditional hotel accommodations. By acquiring HomeAway, Expedia gains access to a massive inventory of over 1.2 million properties globally, making it a formidable competitor in the vacation rental space.
Enhancing Customer Experience
Integrating HomeAway into Expedia’s existing portfolio will enhance the customer experience significantly. With HomeAway’s robust online booking system, travelers will benefit from a streamlined process when booking their desired properties. Moreover, the combination of Expedia’s advanced technology and HomeAway’s market expertise will create a more transactional and efficient platform for users, ensuring they can find the perfect vacation rental to suit their needs.
Strengthening Market Position
This acquisition allows Expedia to strengthen its position in the lucrative travel market. HomeAway’s established brand recognition and customer loyalty will complement Expedia’s existing lineup of trusted travel brands, such as Hotels.com and Orbitz. This merger presents an opportunity to cross-promote services and expand customer reach, particularly towards younger travelers who prefer vacation rentals over traditional hotel stays.
Regulatory Approval and Financial Considerations
While both companies’ Boards of Directors have unanimously approved the acquisition, the transaction is still subject to customary closing conditions, including obtaining regulatory approvals. Expedia’s approach, which includes offering $10.15 per share in cash alongside a portion in Expedia stock, indicates confidence in the long-term benefits of this strategic move. Investors are encouraged to monitor the progress of this acquisition as it unfolds, especially considering its potential impact on stock performance.
Future Growth Opportunities
The acquisition of HomeAway marks a significant milestone for Expedia as it seeks to position itself not only as an online travel agency but as a multi-faceted travel platform. By broadening its offerings, Expedia can capitalize on the growing trends favoring alternative accommodations. This positions the company well to attract a diverse range of travelers and maximize revenue streams from various segments of the travel industry.
Partnership Integration
Expedia’s CEO has expressed tremendous respect for the HomeAway team and is keen on leveraging their capabilities to accelerate the integration of a fully online bookable marketplace. The merger is expected to facilitate a smoother transition for HomeAway as it shifts towards a transactional model, thereby enhancing its market competitiveness.
As Expedia continues to adapt to shifting market dynamics, its acquisition of HomeAway, Inc. represents a crucial step in ensuring its future success in the travel industry. By embracing the vacation rental trend and focusing on enhancing user experiences, Expedia is poised to lead in this rapidly evolving landscape.
FAQ on Expedia’s Acquisition of HomeAway, Inc.
Q: What is the value of the acquisition? A: Expedia has agreed to acquire HomeAway for an equity value of approximately $3.9 billion in cash and Expedia common stock.
Q: When did this acquisition take place? A: The announcement of the acquisition was made on November 4, 2015.
Q: What are the terms of the acquisition? A: Expedia will offer to acquire each outstanding share of common stock of HomeAway in exchange for $10.15 in cash and 0.2065 of a share of Expedia common stock.
Q: Who approved the acquisition? A: The Boards of Directors of both companies unanimously approved the transaction.
Q: What will be the impact of this acquisition on HomeAway? A: The acquisition is expected to accelerate HomeAway’s shift from a classified marketplace to an online, transactional model, enhancing experiences for travelers and property managers alike.
Q: What brands are included in the acquisition? A: The acquisition includes all of HomeAway’s brands, which are leaders in the vacation rental space.
Q: When is the transaction expected to close? A: The companies anticipate that the transaction will close in the first quarter of 2016.
Q: How will Expedia benefit from this acquisition? A: Expedia aims to leverage its expertise in powering global transactional platforms and its industry-leading technology capabilities to enhance HomeAway’s operations.