Expedia to buy HomeAway for $US3.9 billion

Janney Montgomery Scott upped their target price on shares of HomeAway from $28.00 to $31.00 and gave the stock a “neutral” rating in a report on Tuesday, August 11th. The boards of directors of both companies have unanimously approved the transaction, which is expected to close in the first quarter of 2016. “This is our corporate headquarters, and, if there’s anything we’ve learned over time, it’s great to have as many people running your company in the same place”.

HomeAway, founded in 2005, has more than one million vacation listings including many from property owners under its own brand and VRBO, which stands for vacation rental by owner. In October, private equity firms Thoma Bravo and Silver Lake Partners said they plan to take Austin-based SolarWinds (NYSE: [ticker:SWI]) private in a deal valued at $4.5 billion. “This puts HomeAway into a different realm, and being part of Expedia will make them a stronger competitor”.

The deal positions Expedia to compete against home-rental businesses like Airbnb Inc., which has cut into the hotel-room market.

But defenders of the deal said competition is coming from sites which scan online travel deals like Hipmunk and review websites like TripAdvisor. The company also announced that it has entered into a definitive agreement under which Expedia, Inc. Expedia said it could help the company capture more business by combining.

Reuters adds that Khosrowshahi said in an investor call last week that the impact of Airbnb to the company has been “immaterial”.

Last month, the Bellevue, Wash.-based company closed its $1.6 billion acquisition of Orbitz Worldwide. Expedia now has more than 200 travel booking sites in more than 70 countries, according to its website. HomeAway offers various value-added services to supervisors and property owners as well regarding voyagers, which include Insurance Products Carefree Rental Guarantee and Tax Filing Services.