Despegar.com (DESP, Financial) shareholders received a boost as Prosus announced its acquisition of the company for $19.50 per share, totaling an enterprise value of approximately $1.7 billion. This all-cash deal represents a 33% premium over the previous closing price. The board of DESP has approved the transaction, which is expected to finalize in the second quarter of 2025.
Despegar operates in over 19 Latin American markets, utilizing two main business models: an omnichannel B2C platform and a rapidly expanding B2B segment. The company handles over 9.5 million transactions annually, generating $5.3 billion in gross bookings and $706 million in revenue, establishing its leadership in the Latin American online travel industry.
Recently, DESP achieved two significant milestones in Q3. It secured a new 10-year Lodging Outsourcing Agreement with Expedia starting in 2025, enhancing its lodging supply. Additionally, DESP improved its AI travel assistant, Sofia, into a SaaS offering, allowing partners to integrate it into their platforms. This development is expected to become a growing source of recurring revenue.
Prosus aims to leverage its extensive consumer ecosystem to drive user growth and engagement on Despegar, while introducing new products and services. Synergies are planned between Despegar and Prosus's other regional businesses, such as iFood, Latin America's largest food delivery platform, and Sympla, a leading events platform.
In Q3, Despegar reported revenue growth of 8.9% year-over-year, or 53% on an FX neutral basis, reaching $193.9 million. The company focused on profitability in key markets like Brazil and saw significant demand recovery in Argentina. Consequently, adjusted EBITDA surged 94% year-over-year to $48.0 million, achieving a record margin of 24.8%. Despite FX challenges, demand remains robust across the region.
The 33% premium offered by Prosus is attractive for DESP investors. Recent positive developments, including the Expedia lodging deal and the expansion of Sofia AI technology, highlight the company's value. Prosus recognized this potential, especially following a recent stock pullback.
