Today, Expedia Inc. announced that the company will acquire Orbitz Worldwide Inc. and all of its associated brands for $12 cash per share, an approximate total value of $1.6 billion.
“We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team,” stated Dara Khosrowshahi, president and chief executive officer of Expedia Inc. “This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world.”
In a webcast conference call held to discuss the transaction this morning, Khosrowshahi added, “As a result of this deal, we intend to bring together the best of both companies and in the process, provide Orbitz brands access to the resources of Expedia Inc. to continue to grow and thrive in a highly competitive global travel market.”
Orbitz representatives are similarly enthusiastic. “Our mission at Orbitz Worldwide has been to build our brands to be the world’s most rewarding places to plan and purchase travel,” Barney Harford, chief executive officer of Orbitz Worldwide, commented. “We’re excited for Orbitz Worldwide to join the Expedia Inc. family and for our teams to work together to further enhance the offerings we provide to our customers and partners.”
Mark D. Okerstrom, Expedia’s executive vice president and chief financial officer, said the company sees a number of sources of value creation arising from the acquisition. “It will immediately add a portfolio of well recognized brands, which will help us compete for the attention of travelers in this huge rapidly growing but also highly fragmented and highly competitive $1.3 trillion global travel market,” he stated. On a standalone basis, Orbitz is a profitable business, he added, recording $12 billion in gross bookings, $930 million in revenue, and $155 million in adjusted EBITDA for 2014.
The deal has been approved by both companies’ boards of directors; however, it is still subject to approval by the shareholders of Orbitz Worldwide’s common stock and other closing conditions, including regulatory approvals. Qatalyst Partners, a global, independent investment bank, offered Orbitz shareholders a fairness opinion and has recommended that they vote in favor of the merger.
There is no set closing date at this time.