Priceline has agreed to buy OpenTable the online reservation company for restaurants for over $2.6 billion. Priceline, the online travel business should be helped by branching out into a new segment of business.
Darren Huston the President and CEO at Priceline said travelers are also diners and they are the same customers and that will give an opportunity to cross promote the two brands.
Priceline will be paying $103 a share, which equates to a premium of 46% to the Thursday price at closing of OpenTable, which was $70.43.
OpenTable seats over 15 million diners each month at over 31,000 restaurants. The online reservation company enables users to make reservations that are free at restaurants via its apps and website.
The site makes money through charging the restaurants fees for each booking. Users are also able to read restaurant reviews and look at menus through the site.
The reservations company will remain based in San Francisco as well as operate as a standalone business run by its current executive staff.
The first goal for Priceline, said Huston was to expand internationally OpenTable. Users can already make reservations through the site in Berlin, Hong Kong, London and other international cities. However, Huston said he wanted to open the site up to additional cities. Since Priceline has offices in each major city worldwide, doing this with OpenTable will be seamless.
OpenTable is working to make it easier for new restaurants to become members of the service, said the Priceline CEO. The business is working on the creation of a system that is cloud-based instead of using hardware that it needs to be installed in restaurants in order for them to be on OpenTable.
An average of over 1 million hotel guests stay at accommodations booked through Priceline each night. There are more than 480,000 properties in over 200 countries worldwide.
The company, based in Norwalk, Connecticut changed from Priceline.com to the Priceline Group in April to make it better reflection its complete business. The Priceline brands include KAYAK, agoda.com, priceline.com, rentalcars.com and Booking.com.
