How Does Homeaway Do Acquisitions ?

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Vacation Rental Owners might find the following extract from a recent article on Homeaway interesting, as it gives some insight into the strategy and tactics that Homeaway uses to identify potential acquisition targets and then to close these acquisitions. it has clearly been a successful approach, as they continue to be the market leader .....



Co-founder and CEO Brian Sharples, a former Bain & Co. consultant, knew that one way to outdo rivals was to swallow up smaller competitors to gain market share. In fact, HomeAway has acquired nine leading vacation rental websites including Vacationrentals.com, Owners Direct and VRBO.com, an acronym for Vacation Rentals by Owner.


HomeAway doesn't just evaluate a rival's books. Analysts say it seeks to form a relationship with top executives to ensure that they're a good fit with the company.


The upshot of all this merger activity has been positive for HomeAway. In the first quarter ended March 31, 2013, revenue surged 24% to $79.5 million from $64.1 million in the first quarter of 2012.

HomeAway generated 84% of that revenue from 742,000 listings in which subscribers pay $349 to $999 annually to publicize their home availability on its website. Sixty-two percent of its global revenue comes from the U.S., 36% from Europe, and 2% from South America and Australia.

When Sharples and co-founder Carl Shepherd, currently chief strategy officer, first launched HomeAway in 2005, Shepherd taught him to "get to know the other company before acquiring them," he said. They'd spend six months to two years investigating the rival's culture and getting to know the CEO to ensure that it was a good match. "We took a partnership approach," he said.


In addition to cultural fit, Sharples targets ascending companies. He's looking for 30% growth. "We don't like to buy companies that haven't demonstrated they can make money," he said.


When he researched what it would take to grow, Sharples realized that "we would need to buy a number of companies in different geographies to be successful."


Expanding its footprint into global locations creates a "network effect," Sharples said. "The more travelers you have, you have more choice," he said. As HomeAway attracts more travelers, it spurred more homeowners to list on the site.

Homeaway Acquires travelmob for Asia Pacific expansion

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HomeAway has signed an agreement to acquire majority control of travelmob™, an online start-up for vacation rental properties in Asia Pacific.

HomeAway has a previous relationship with travelmob through a distribution partnership announced in March of this year. Built on a transaction-based model, travelmob features over 14,000 Asia Pacific short-term rental listings including luxury villas, urban apartments, houseboats, a private island and even some shared spaces.

"Economists note over 100 million people will enter the Asian middle class each of the next several years, and Asia will have an increasing influence over the world's economic growth. We believe this will have significant implications for not only travel but also for the purchase of homes, both of which drive HomeAway's growth," says Brian Sharples, chief executive officer of HomeAway. "We view Asia as a region where we can build tremendous incremental value for our shareholders and existing customers over the next several years. Given this opportunity, we're excited to work with the experienced travelmob team to address today's market needs in Asia -- where vacation rentals are mostly new, but alternative accommodations are not -- to build scale and accelerate the development of the vacation rental industry."

Could be the start of something big  :)

Homeaway Acquires Vacation Rental Management Software Company

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Homeaway has acquired Instant Software Incorporated (ISI), a leading provider of vacation rental management software.

Although Homeaway has previously partnered with ISI, with the acquisition, Homeaway should be able to better integrate ISI vacation rental management software into its offerings.

ISI's software is targeted mainly at larger vacation rental property owners / professional property managers and they boast more than 1400 property management customers. Although there is no indication of the actual number of vacation rental properties that this represents, it is no doubt a significant addition to the Homeaway portfolio.

It will also be interesting to see how Homeaway will use the technical resources to increase the value of its offerings to its existing customers of both prefessional property managers and private vacaation rental owners.

You can read more here