Companies with histories of spin-offs seem to have a penchant for that particular corporate transaction. Expedia (EXPE), which was spun out of IAC in 2005, announced today that they are planning on splitting the company into two separate pieces, TripAdvisor and Expedia Inc. TripAdvisor will run the current TripAdvisor Media Group, the world’s largest travel site, while Expedia will include the travel transaction brands such as Expedia, Hotwire.com and Hotels.com.
TripAdvisor generated $486m in revenue during 2010.
The spinoff is expected to be completed during Q3 2011 in the form of a stock distribution. Interestingly, the company announced it intends to seek shareholder approval for the transaction.
The company provided no reason for the action, but it is likely that management feels that TripAdvisor’s higher-growth and higher-margin business will be more fairly valued as an independent company. TripAdvisor has largely been run as an independent company by founder Stephen Kaufer since its 2004 acquisition by Expedia, and the spinoff should have little operational impact.
Disclosure: The author has no position in any stock mentioned
- Expedia Will Spin Off TripAdvisor As A Public Company (paidcontent.org)
- Expedia To Spin Off TripAdvisor As A Public Company In Q3 2011 (techcrunch.com)