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Expedia takes majority trivago stake

by Richard Morgan  |  Published December 21, 2012 at 1:55 PM
Expedia Inc., the world's largest online travel company, announced an agreement Friday, Dec. 21, to expand its footprint overseas by taking a 62% equity stake in German metasearch site trivago GmbH.

Total consideration of €477 million ($632 million) consists of €434 million in cash and €43 million in Expedia common stock. Upon the deal's completion, 36% of the equity will remain with three members of trivago management and 2% will be held by select trivago employees.

Seven-year-old trivago is an online search site that compares hotel rates from more than 600,000 hotels on over 140 booking sites. It also serves up hotel reviews -- some 34 million of them -- often accompanied with photos.

The Düsseldorf company has already extended its online platform to 23 languages in 32 countries. And, relying mostly on a cost-per-click revenue model, trivago claims to have "profitably doubled revenue each year since 2008." The revenue expectation for calendar 2012 is €100 million.

Terms also include puts and calls that, if exercised, will take Expedia to 100% ownership on the deal's third or fifth anniversary. The purchase price of these options will be based on the fair market value of trivago shares when and if they're exercised.

Expedia declined to identify advisers but in a regulatory filing cited the Hamburg office of Freshfields Bruckhaus Deringer LLP as a legal adviser.

Seller trivago used the Düsseldorf office of European law firm Noerr LLP in the same capacity.

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Tags: Expedia Inc. | Freshfields Bruckhaus Deringer LLP | metasearch | Noerr LLP | trivago GmbH

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