Despite taking a $941 million write-down on its two-year-old acquisition of OpenTable, travel booking company Priceline Group (PCLN) continues to see upside, in part due to a host of other acquisitions the company had booked successfully.
Priceline Group announced on Monday after the market close that it took a writedown for the OpenTable division it acquired for $2.6 billion in 2014 and that it plans to slow down international investments toward the restaurant booking business.
Priceline planned to leverage its strong international business with OpenTable's solid footprint in the U.S., but has come to realize that doing so would take longer than what was initially thought, said Cantor Fitzgerald analyst Naved Khan.
"There was a rationale in a sense that if you travel, you have to dine out," said Khan by phone of Priceline's 2014 acquisition of OpenTable. "Travelers are candidates for eating out."
Priceline, which has largely built itself through M&A, paid a hefty price tag of a nearly 50% premium for OpenTable a little over two years ago.
OpenTable is among Priceline's portfolio of brands that also include Priceline, Booking.com, Kayak, Agoda.com and Rentalcars.com.
Priceline's portfolio itself underscores the company's stellar track record in M&A as the main businesses -- Booking.com, Kayak, Agoda.com and Rentalcars.com -- all came from previous acquisitions.
Purchasing Booking.com and Agoda.com expanded Priceline's presence overseas particularly in Europe and Asia, respectively. Kayak significantly boosted Priceline's traffic while Rentalcars.com was a diversification play and gave the buyer a new source of growth outside of its core travel booking business.