) has agreed to acquire Auto Escape Group which is jointly owned by
private equity fund Montefiore Investment and Auto Escape Group's
The terms of the deal have not been disclosed and the
transaction is expected to close during the third quarter of 2014
subject to various regulatory approvals.
Founded in 1999, Auto Escape Group is a European online car
rental company offering car hire services via two brands: Auto
Escape and Car del Mar. Auto Escape employs about 115 people and
offers nearly 300 cars in 125 countries through car rental
Upon deal closure, Auto Escape Group will become part of the
CarRentals.com brand and report to Henrik Kjellberg, President of
the Hotwire Group.
The acquisition will add more than 20 websites, further boosting
Expedia's corporate travel portfolio. The deal will help expand
Hotwire Group's car rental business as well as vacation packages
under Expedia Inc. brands. Additionally, the deal will enhance
cost-efficiency measures while facilitating Expedia's expansion
into the European car rental market.
We believe that it is important for Expedia to expand
internationally, especially since the strategy has worked so well
for its major competitor
), which owns Booking.com in Europe and Agoda.com in Asia.
Additionally, the company has been entering into strategic
alliances to fight the increasing competition in the online travel
industry. Last year, Expedia signed a strategic long-term marketing
partnership with Travelocity to share the workload on searches,
bookings and promotion.
We believe these alliances and acquisitions will help Expedia to
grow in the future.
Expedia, one of the leading online travel companies in the
world, reported first-quarter earnings of 1 cent, in line with the
Zacks Consensus Estimate. However, revenues were $1.20 billion, up
4.2% sequentially and 18.6% year over year. While growth rates
across most brands were healthy, Expedia, Trivago and Hotels.com
were the strongest in the first quarter.
Expedia has a Zacks Rank #3 (Hold). Other stocks that look
attractive at the current levels are
Vipshop Holdings Ltd.
), both sporting a Zacks Rank #1 (Strong Buy).
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