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UPDATE 1-Kayak prices IPO above range
By Olivia Oran
July 19 (Reuters) - Online travel company Kayak Software Corp priced its initial public offering on Thursday at $26, above its expected range, an underwriter said.
The Norwalk, Connecticut-based company raised $91 million, pricing 3.5 million shares as planned. It had intended to price the offering in a range of $22 to $25.
Kayak's IPO was originally slated to go following Facebook Inc's public debut in May. But those plans were put on hold as the shares of the social networking company lost roughly a third of their value, a person familiar with the matter said at the time. Kayak initially filed for its IPO in November 2010.
In fiscal year 2011, Kayak's revenue rose 32 percent to $224.5 million. The company's net income grew 21 percent to $9.7 million.
Kayak, which uses a website and mobile site to help consumers compare prices for airlines and hotels, faces competition from Google Inc, Orbitz Worldwide Inc , Expedia Inc, Travelocity and Microsoft Corp .
"Longer term, there is a lot of uncertainty about competition and that potentially could weigh on Kayak," said Jim Krapfel, an analyst with Morningstar.
Another major issue for Kayak is the impact of Google's recent $700 million acquisition of ITA Software. Kayak used ITA Software to power 39 percent of its overall airfare query results for the first four months of 2012 and its agreement with the company expires in December of next year. This raises questions about Kayak's ability to enter into another agreement with ITA - perhaps at unfavorable terms - or to find another replacement technology, say analysts.
Kayak's IPO comes on the heels of recent offerings from technology companies ServiceNow Inc and Palo Alto Networks Inc.
Kayak's venture backers include Sequoia Capital, Accel Partners, General Catalyst Partners and Oak Investment Partners.
The IPO is being underwritten by Morgan Stanley, Deutsche Bank, Piper Jaffray, Stifel Nicolaus and Pacific Crest Securities.
Kayak will use the proceeds for working capital and other general corporate purposes.
The company intends to list on the Nasdaq under the ticker "KYAK."
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