Priceline announced today that it has agree to acquire Kayak for $40 a share, valuing the online travel booking site at $1.8 billion. Priceline will pay approximately $500 million in cash and $1.3 billion in equity and assumed stock options, it announced today in a press release.
Kayak, which just completed its IPO in July 2012, initially filed to go public in November of 2010 but delayed the deal while looking for an improved market. Kayak’s stock closed at $31.04 on Thursday.
The company allows customers to compare travel prices across services, and is best known for its airline flight search, although it also does hotels and rental cars. Kayak processes more than 100 million user queries each month, it noted in the press release. The company was founded eight years ago by Paul English and CEO Steve Hafner. Priceline is one of the largest online travel sites in the world.
“A bomb just dropped in the online travel world,” wrote Rafat Ali of Skift. He noted that “Priceline will gain a great online and mobile team to build its portfolio and will put muscle behind the Kayak brand.”