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Online travel booking company Priceline.com has expanded into restaurant reservations with the acquisition of OpenTable for $2.6 billion. The Boards of Directors of both companies have unanimously approved.

Priceline says that OpenTable connects 15 million people to 31K restaurants across the world with the help of its hardware and software solutions. The company is particularly strong in the mobile department, deriving 42% of North America reservations (that’s 36% of total reservations) in the last quarter from mobile devices.

OpenTable generated just $53.8 million in revenue and 11 million in profits in the last quarter, which if annualized would fetch Priceline just $215 million in revenue and $44 million in profits. While 12X revenue is not a huge sum to pay considering the company’s double-digit growth rate, but this would have little impact on Priceline, which reported revenue and profits of $1.64 billion and $360.7 million, respectively in the last-reported quarter itself.

So what could be the rationale for the deal? Priceline says it is OpenTable’s restaurant marketing expertise, which makes sense because of the possibility of scaling up to increase penetration in North America and internationally (76% of OpenTable’s restaurant inventory is in North America). Of course, it will also welcome the 15 million-odd customers and cross sell its travel bookings to those of them that don’t already use Priceline.

OpenTable is getting $103 a share, or a 46.2% premium to yesterday’s closing share price. So it’s not surprising that shares opened at roughly that price this morning. Also not surprising is the fact that shares of its peers Yelp , GrubHub and Groupon are also soaring on chances of similar takeovers. Yelp shares opened 10% higher and are up over 12% since then. GrubHub shares opened nearly 8% higher and have climbed another 7%. Groupon shares opened around 4% higher and are up over 5% in early morning trade.

Both Priceline and OpenTable have a Zacks Rank #3 (Hold).

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