HomeAway Buys Vacation Rental Management Software Company

Online vacation rental marketplace operator HomeAway this morning announced that it has agreed to acquire Instant Software, makers of vacation rental management software. With the purchase, HomeAway is able to expand its suite of product offerings for professional vacation rental managers.

Terms of the acquisition were not disclosed, but it’s likely material for HomeAway as it will add another 50 employees to its now 710-member team.

Instant Software, founded back in 1994, is said to have about 1,400 property management customers, compared to more than 4,000 that use HomeAway websites for distribution.

Prior to the deal, HomeAway had long partnered with the company to provide electronic distribution and online booking to professional managers using their software through ISILink. HomeAway says it plans to invest further in this capability, making the service accessible to a wider range of property managers on a variety of distribution platforms.

HomeAway has also announced the formation of a new team to oversee development, sales and third-party distribution agreements for property management software. This group, headed by VP and General Manager John Banczak, includes ISI and HomeAway’s two existing property management businesses for the B&B industry, Webervations and RezOvation.

Sources close to the company have told us in the past that it is ramping towards an IPO, likely in 2011. Last year, the company was valued at $1.4 billion after a $250 million round of financing.

Revenue at the time was around $150 million, we heard. Now revenue is more like $200 million/year, with $70 million or so in pure profit.