Priceline.com Inc. announced Thursday it has agreed to buy Kayak Software Corp. for $1.8 billion in cash and stock to expand its Web-based travel services.
Kayak, with 185 employees, had $224 million in revenues in 2011. Priceline will pay $40 a share for the company, a 29 percent premium to its closing price of $31.04 Thursday and better than 50 percent more than its initial public offering price in July of $26 a share.
The transaction, which is subject to shareholder approval, has been approved by both boards, Kayak said.
"Paul English and I started Kayak eight years ago to create the best place to plan and book travel," Steve Hafner, chief executive officer and cofounder, said in a statement. "We're excited to join the world's premier online travel company. The Priceline Group's global reach and expertise will accelerate our growth and help us further develop as a company."
The company said it generated revenue of $78.6 million in the third quarter, an increase of 29 percent from the period a year earlier. Its net income rose 14 percent to $8 million.
"Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers," Priceline Chief Executive Officer Jeffery Boyd said in the statement.
Kayak's stock has risen since its I.P.O. in July, in which its shares were priced at $26 apiece. The company had a long journey to the public markets, after initially filing to go public in 2010.
