Online travel provider Expedia Inc.
Tuesday obtained
private investments of $50 million from Technology Crossover Ventures (TCV), a leading
venture capital firm, and $10 million
from Microsoft Corp.
As part of the financing agreement, Expedia will
issue about 3.6 million shares of
common stock and 723,000 warrants with an exercise price of $16.60 in
exchange for the combined investment.
The price per share is based on the average closing price of Expedia
stock over the three-day
trading period ending June 23,2000.
Upon completion of the financing, TCV and Microsoft
will own, respectively,
7 percent and 70 percent of Expedia’s common shares outstanding.
As part of the agreement, Jay Hoag, a founding general partner of TCV,
will join
the Expedia board of directors.
Hoag noted that online travel and lodging are extremely viable sectors in
Internet commerce.
“As venture capitalists, we look for ways to build great companies that
will generate long term returns,” he said. “TCV believes that Expedia has
the strongest strategic position in this market and a highly compelling
business model.”
The transaction is expected to close after the early
termination or expiration of the Hart-Scott-Rodino waiting period, which will conclude no later than early August.