By Brenon Daly
As a private company, HomeAway (NASDAQ:AWAY) was a steady buyer. Founded in 2005, the vacation rental website had notched 11 transactions through last year. When it went public last June, the company raised $216m. With the new cash – not to mention shares that, at least initially, were richly valued – HomeAway had plenty of resources to continue its shopping. But that’s not the way it played out for the consolidator.
The company only stepped back into the M&A market earlier this week, reaching for Top Rural, a Madrid-based site that offers vacation rentals in small towns and the countryside in Europe. (The purchase comes roughly 11 months since HomeAway’s previous acquisition, the second-longest M&A dry spell at the company.) What’s more, it’s a rather small step back into the market. HomeAway, which held some $184m in cash and short-term investments at the end of December, is handing over just $19m for Top Rural.
With Top Rural, HomeAway returns to an acquisition strategy it has frequently used: geographic expansion. The Austin, Texas-based company has reached for similar rental sites in Australia, Brazil, France and the UK. (Currently, HomeAway has listings in some 168 countries.) In its other international shopping trips, HomeAway has paid between $2m and $45m for the sites.