Priceline.com (PCLN) recently announced the pricing of Senior Unsecured Notes aggregating €1 billion, carrying a coupon rate of 1.8% due in 2027 in an underwritten public offering.
Priceline stated that the transaction proceeds will be used for general corporate purposes, share repurchases, repayment of debt and acquisitions. Deutsche Bank AG, London Branch, Goldman, Sachs & Co., Citigroup Global Markets Limited, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC will be acting as joint book-running managers for the offering.
Priceline.com is one of the leading online travel companies in the world. In fourth-quarter 2014, the company garnered $755.3 million of cash from operations and spent $504.9 million on share repurchases.
At quarter-end, Priceline had cash and short-term investments balance of $4.29 billion, down $1.95 billion during the quarter. The company had $3.85 billion in long-term debt and $37.2 million in short-term debt, totaling $3.89 billion. The net cash position at quarter-end was $403.6 million, down from $2.31 billion at the beginning of the quarter.
We believe that Priceline has a strong balance sheet, which will help it to capitalize on investment opportunities and pursue strategic acquisitions, further improving its growth prospects. We believe the Senior Notes offering will lower its cost of capital, thus strengthening the balance sheet and supporting future growth.
Currently, Priceline has a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space include PetMed Express, Inc. (PETS), Autobytel Inc. (ABTL) and EVINE Live Inc. (EVLV). While PetMed sports a Zacks Rank #1 (Strong Buy), Autobytel and EVINE Live have a Zacks Rank #2 (Buy).
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