In a deal likely to send a shiver down the spine of budget accommodation websites across the globe, Web Reservations International has acquired HostelBookers.
Terms of the deal have not been disclosed.
The acquisition is an all-paper deal and is expected to need regulatory approval before completion, WRI, owner of HostelWorld, says.
HostelWorld and HostelBookers are the two major players in the hostel and budget accommodation sector, with Ireland-based HostelWorld the older of the pair having launched online in 1999.
Its once arch rival was born in 2004 and now claims to have around 20,000 properties on its portfolio.
The deal is being touted by WRI CEO Feargal Mooney as a deliberate attempt to compete head-to-head with what he calls the "big beasts" in online accommodation: Expedia and Booking.com.
He adds:
"The capacity to inject more resources into online marketing and technology is absolutely key to this sector, and our increase in scale will enable us to ramp that activity up in the face of some very large and dominant competitors."
"We want to provide a service that both competes head to-head with the large online travel agents, and retains the personal service and sector knowledge that comes from being a smaller, budget-focused player – meeting the needs of hostels, B&Bs and smaller hotels, and providing enhanced service to our customers and partners."
HostelWorld marked its tenth anniversary in 2009 by selling to private equity giant Hellman and Friedman, current investor in the likes of Nielsen and a previous backer of DoubleClick.
WRI also owns the lower-profile Hostels.com brand. HostelWorld and HostelBookers employ 140 and 120 people respectively.
HostelWorld has made a big play with its distribution partner strategy in recent years, having secured deals with the likes of Lonely Planet, TripAdvisor, Trivago and around 2,800 others.