The Priceline Group's Familiar Story: Smart Multi-Billion Dollar Acquisitions

Priceline made news Friday with the announcement of its $2.6 billion buyout offer for OpenTable , the leading online reservation portal for U.S. diners. The offer price came in at a 47% premium to OpenTable's closing share price before the announcement, or a rich 13 times sales.

With lower profitability than Priceline and 2013 revenue that amounts to less than 3% of Priceline's $6.8 billion, OpenTable looks, on paper, to be an expensive target that may not move the needle in the near term. However, investors should pay attention to the bigger picture.

Priceline management has an impressive track record of acquiring complimentary businesses that can scale up rapidly and benefit from Priceline's presence globally. CEO Darren Huston has even gone so far as claiming that Glenn Vogel -- Priceline's Corporate Development lead -- has made some of the Internet's most successful acquisitions such as and Kayak. Given this track record and the company's willingness to pay cash up front for OpenTable, the Priceline team believes in OpenTable's growth prospects.

In the included video, Fool Technology Analysts Max Macaluso and Nathan Hamilton talk about Priceline's rationale in acquiring OpenTable and the upside that remains for the company under the Priceline umbrella, in addition to discussing the sympathetic 14% pop that Yelp shares experienced as well.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

The article The Priceline Group's Familiar Story: Smart Multi-Billion Dollar Acquisitions originally appeared on

Nathan Hamilton owns shares of Apple. The Motley Fool recommends Apple, OpenTable, Priceline Group, and Yelp. The Motley Fool owns shares of Apple and Priceline Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story