Priceline is buying OpenTable for $2.6 billion, as the online travel company looks to expand into restaurant bookings.
At $103 a share, Priceline is paying a large 46% premium to buy OpenTable. The deal comes about a year after Priceline closed its much talked-about purchase of Kayak, a transaction valued at $2.1 billion.
When asked about the premium in a call discussing the purchase today, Chief Executive Officer Darren Huston said OpenTable "is going to be a valuable addition to the group, and will make an appropriate level of return over the long-term."
He pointed out that ultimately, the two companies are tapping the same group of customers.
"I mean, travelers are diners," Huston said. "And in fact, they're some of the most valuable diners because they're transient diners and we believe that there's opportunity to cross promote the OpenTable and the rest of the group's brand to the same customer base ... That's an area that we've done some things in and we think we're pretty strong at demand generation and we think this is another important leg of the stool for the Priceline Group."
Most of Priceline's $6.79 billion in revenue last year came from booking fees. OpenTable brought in $190 million in revenue last year, mostly from reservations — the service says it seats more than 15 million diners a month at more than 31,000 restaurants. It's been trying to expand internationally, and Priceline will presumably help the company with that.