EXPEDIA TO BUY HOMEAWAY FOR $3.9B

Original Story: usatoday.com

SAN FRANCISCO - Expedia is deepening its travel-company bench with a $3.9 billion purchase of vacation rental site HomeAway.

Bellevue, Wash-based Expedia announced the deal Wednesday, which adds the Austin, Texas, company to a portfolio that also includes booking sites Orbitz and Travelocity. A Los Angeles M&A lawyer assists clients in leveraged buyouts, company reorganizations, and mergers and acquisitions.

“We have long had our eyes on the fast growing $100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years,” Dara Khosrowshahi, Expedia's CEO, said in a release. “Bringing HomeAway into the Expedia family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step.”

HomeAway's stock (AWAY) was up 22% in after hours trading on the news, while Expedia shares were down at the close 1.63% to $134.17.  HomeAway's brands include HomeAway, VRBO (Vacation Rental By Owner) and similar sites overseas. All told, the company says it represents 1 million paid listings in 190 countries. A Los Angeles finance attorney is reviewing the details of this story.

The deal comes on the same day that short-term accommodations giant Airbnb won a significant victory in San Francisco, where voters shot down a measure that would put greater restrictions on those seeking to rent out rooms or entire properties. Airbnb argued that its service helps homeowners stay in their residences by providing extra income through rentals, while opponents - who were outspent eight to one by Airbnb - countered that Airbnb rentals cut into already scarce housing options.

While Airbnb typically offers short-term rentals and HomeAway often targets travelers looking for one-week or longer stays, buying HomeAway instantly allows Expedia to expand its options for consumers beyond hotels.

"We're eager to benefit from Expedia's distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers," said HomeAway CEO Brian Sharples in a statement. "In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come." A Los Angeles real estate lawyer is following this story closely.

The transaction, a combination of cash and stock, amounts to $38.31 per share based on Expedia's stock price at the end of day on Nov. 3.

It’s the latest acquisition for Expedia, the number one digital travel provider, which purchased Orbitz Worldwide for roughly $1.6 billion earlier this year. In January, it bought Travelocity for $280 million. Hotels.com, and Hotwire are some of the other sites that fall under Expedia's umbrella.

Expedia chief financial officer Mark Okerstrom said during the investors call that "this acquisition is a bit different,'' from the other deals forged this year. "Specifically we anticipate that HomeAway will continue to be run relatively autonomously out of Austin.''

HomeAway, which sees $15 billion in bookings from its vacation rental listings, expects its online transactions to grow significantly because of its tie-up with Expedia. "Maybe about a fourth to third of revenue is through (the) online booking channel,'' Sharples said in a call with investors on Wednesday. But in the next two to three years, "we hope to have most of our transactions running through.''

Sharples added that “this is a place where everyone's going to have to be. . . It’s just too big for people who are in this business to ignore.’’

The HomeAway deal is expected to become final during the first three months of next year.