$190 Million Priceline Stock Deal
Liberty Media Corp. and Vulcan Ventures Inc. have invested $190 million in priceline.com stock. Stamford, Conn.-based priceline.com will use about $125 million of the after-tax proceeds of this transaction to participate in the third financing round of Priceline WebHouse Club, an e-commerce service offering consumers savings on groceries and gasoline.
The groceries service, now active in ten markets, has enrolled more than a million members, the company says, and the groceries and gas services together are adding more than 100,000 new members per week. More than 5,000 supermarkets have joined the WebHouse Club network, including chains such as Kroger, Safeway, Albertson's and Ahold USA.
Priceline WebHouse Club also has entered into long-term agreements with consumer product manufacturing companies that cover more than 120 branded products, including brands in seven of the company's top 10-requested categories. Under these agreements, WebHouse Club receives payments from the consumer product manufacturing companies in exchange for fulfilling a majority of customer orders with their brands.
The gasoline service, launched earlier this month, is also growing rapidly, says priceline.com. In its first four weeks of operation, WebHouse Club customers have priced more than five million gallons of gasoline through the service, it claims. Thousands of gasoline stations nationwide from a variety of brands now participate in the program.
Proceeds from the financing will be used to fund continued national expansion of the grocery and gasoline services, says the company, as well as for ongoing operations and the development and deployment of a high-volume information technology architecture.
Priceline WebHouse Club is a privately held company and a licensee of priceline.com's patented business method. Priceline.com has no investment in the company, but holds a warrant to purchase a majority equity stake in WebHouse Club in the future under certain conditions. Until that warrant is exercised, financial results from the WebHouse Club will not be included in financial results for priceline.com, it says.
Priceline.com, made famous by its crooning pitchman, Star Trek's William Shatner, is the "Name Your Own Price" Internet pricing system. It provides services across four categories: a travel service that offers airline tickets, hotel rooms and rental cars; a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee; an automotive service that offers new cars; and a telecommunications service that offers long-distance calling services. Priceline.com licenses its business model to independent licensees, including Priceline WebHouse Club Inc., PricelineMortgage and Priceline Perfect YardSale Inc.
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