Not content with a commanding presence in online travel booking, Priceline is now aiming at the world of dinner reservations.
The company agreed Friday to buy OpenTable, the giant of the restaurant bookings business, for $2.6 billion in cash. With the deal, it is hoping that combining the businesses of reserving seats for planes and for restaurants will be a smooth and profitable combination.
It is the biggest deal yet by Priceline, which has turned to acquisitions to bolster its stable of online brands. Last year, the company completed its $1.8 billion takeover of Kayak, the travel comparison site.
Driving the deal was not a slowdown in Priceline’s core businesses, including its namesake travel brand, Kayak and Booking.com, according to the company’s chief executive, Darren Huston. Indeed, the company has reported seven straight years of rising profits, earning $1.9 billion last year.
But it had long weighed a potential partnership or acquisition of OpenTable, having met its management team at numerous conferences over the years.
The two companies aren’t quite the same. Priceline serves as an online travel agency, collecting commissions on user reservations. But over its 16 years, OpenTable has spent time and money integrating its software into restaurants’ systems, essentially managing their inventory of seats and letting them keep track of repeat customers.
That business has grown to encompass more than 15 million diners each month at 31,000 restaurants.
After the deal closes, which is expected by the end of September, OpenTable will continue to be led by its current management team and will still be based in San Francisco.
Read the full story at nytimes.com
