Earlier this week, we launched the latest report in our Skift Research service, A Deep Dive Into Priceline’s Competitive Position in Travel 2017.

Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.

Unlike when Ctrip acquired Skyscanner, which was already quite profitable, Priceline buying Momondo was a much different type of acquisition. In 2016, the Momondo Group generated 90 million pounds in revenue with a 45 percent growth rate. However, it spent heavily on marketing and technology to grow, leading to a negative 9.6 percent operating margin. The pound has been volatile, but using the 2016 year-end rate of 1.23, revenue in U.S. dollars would have been $111 million.

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This means that Priceline purchased the Momondo Group for just under five times 2016 revenue. Looking at 2017, assuming a growth rate between the 45 percent in 2016 and 20 percent, the forward multiple would have been in the 3.5 to 4x range. These multiples are much lower than the 6 to 8x range we have seen in the industry. After the OpenTable writedown, Priceline is clearly being patient on acquisitions and that paid off with a premium brand at a discount price.

Momondo Group Financials in Great Britain Pounds

Source: Company Filings, Skift Estimates

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Momondo Group Financials in U.S. Dollars

Constant currency at 1.23x.

Source: Company Filings, Skift Estimates

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This is the latest in a series of research reports, analyst calls, and data sheets aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 hours of desk research, data collection, and/or analysis goes into each report.

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Photo Credit: Momondo Group CEO Hugo Burge at Skift Forum Europe in London on April 4, 2017. Burge left the company after the Priceline Group acquired it. Skift