Expedia Buys Austin’s HomeAway for $3.9B

HomeAway, the provider of an online marketplace for vacation rentals, has sold to Expedia for $3.9 billion in cash and Expedia stock, the third multibillion-dollar deal involving an Austin, TX, company this fall.

Seattle-based Expedia set HomeAway (NASDAQ: AWAY) in its sights because it has been seeking a way to enter the “alternative accommodations” sector and has been working on a partnership with HomeAway for two years, according to Expedia CEO Dara Khosrowshahi. The travel booking giant operates websites that include Expedia.com, Hotels.com, and Hotwire.com.

With HomeAway, Expedia (NASDAQ: EXPE) gains a company that matched vacationers with home owners and managers in 190 countries worldwide and logged 884 million visits in 2014 to the various websites its marketplace is listed on.

HomeAway recorded $446.7 million in revenue during 2014, largely from its listings, but also from advertising and add-on services such as insurance. The company was founded in Austin in 2005 and raised $216 million in an initial public offering in 2011.

Expedia’s offer works out to $10.15 in cash and 0.2065 of a share of Expedia stock for every HomeAway share. The companies expect the deal to close in the first quarter of 2016.

The parade of multibillion-dollar deals began within the past month or so. In October, private equity firms Thoma Bravo and Silver Lake Partners said they plan to take Austin-based SolarWinds (NYSE: SWI) private in a deal valued at $4.5 billion. SolarWinds, which was founded in 1999 and became a publicly traded company in 2009, sells software meant to help manage computer networks for businesses, governments, and schools.

One week earlier, Round Rock, TX-based Dell announced it would acquire Hopkinton, MA-based EMC (NYSE: EMC) for $67 billion in the largest technology deal in history.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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