In the technology world, the flurry of merger-and-acquisition activity continues. This time, merger mania involves online travel giant Priceline (NASDAQ:BKNG) buying out restaurant reservation provider OpenTable (NYSE:OPEN) for $2.6 billion in cash.

If that seems like an eye-popping sum, you're right to be slightly skeptical. After all, the price tag represents a 46% premium to OpenTable's previous closing price. The market was skeptical as well, since shares of Priceline fell 3% after announcing the deal.

But before you go overboard in thinking Priceline got taken to the cleaners, it's worth noting that the deal makes a lot of sense from a strategic point of view. Priceline is a diversified business model, and it will be even more diversified with OpenTable. In addition, while $2.6 billion is surely a boatload of money, it's hardly a burdensome figure for Priceline. That's because Priceline has a large cash pile and can easily afford the acquisition without incurring much damage to existing shareholders.

When you take into account Priceline's strong financial position and the compelling strategic benefits, the deal to acquire OpenTable makes sense.

46% is quite a generous gratuity
It's true that Priceline is paying a hefty sum for OpenTable. In terms of the fundamentals, OpenTable's valuation is sky-high. Priceline is paying about 110 times trailing earnings per share for the company. But it's worth noting that in absolute terms, $2.6 billion isn't a burdensome amount for Priceline.

It's a $62 billion company by market capitalization, with more than $6.7 billion in cash and short-term investments on the balance sheet, and only $3.6 billion in combined current and long-term debt.

The cost to Priceline investors should be limited. OpenTable isn't some speculative start-up that's burning through cash; it's a fairly proven business model that turned a $46 million operating profit last year. OpenTable is posting solid growth across its key metrics.

Revenue and operating profit jumped 18% and 27%, respectively, last year. It's off to a great start to the current year as well. Revenue rose another 18% in the first quarter. It's growing particularly well overseas, as its international revenue soared 29% year over year.

And, as is typically the case with corporate mergers, cost synergies from the deal are likely to boost the level of accretion to Priceline. That's particularly true in this case, as Priceline will be able to offer its broad range of services simultaneously across its different platforms.

Travelers are diners
After announcing the deal, Priceline's CEO summed up the benefits in a succinct, yet accurate, way. He simply stated "Travelers are diners."

Indeed, OpenTable is a great fit for Priceline simply because they are complementary services. The combined entity will offer a much more comprehensive set of services. Remember, Priceline isn't just getaways, it also operates other brands, including,, and Kayak.

With OpenTable in tow, Priceline is one step closer to its goal of becoming a one-stop shop for all hospitality-related needs. Priceline will profit from consumers booking their flights and hotels, renting a car when they arrive at their destinations, and reserving tables at restaurants.

Final Foolish thoughts
The bottom line is that while $2.6 billion is a great deal of money, investors don't have much to worry about, financially speaking. Priceline lost nearly $2 billion in market value after announcing the acquisition, so the financial effects are virtually priced in.

Priceline can easily afford even the lofty premium for OpenTable, since it has more than enough in cash and equivalents sitting on its balance sheet. That money is earning very little for investors, so now is a good time to deploy cash on an opportunity such as this.

OpenTable is growing and is already profitable. Priceline won't have to work too hard to get it off the ground. Priceline's multitude of travel and hospitality services are poised to turn it into a full-fledged powerhouse in its industry.