Dec 19, 2019

IAC to spin out Tinder parent company Match Group

Photo: Mat Hayward/Getty Images for Billboard

IAC (InterActiveCorp.), an internet media holding company, agreed on Thursday to separate one of its largest subsidiaries, Match Group, which houses several dating apps including Tinder.

Why it matters: IAC's stated goal has long been to build and/or acquire online services and to grow them to the point that they can be spun out independently, providing dual value to shareholders.

  • It's been teasing this strategy with Match Group since October.
  • Match Group’s stock was up around 5% in early-hours trading after the announcement.

Details: In a statement, IAC says that the agreement has been approved by the board of directors of IAC and Match Group, and was “recommended to the Board of Directors of Match Group by a special committee made up of disinterested directors.“

  • The company says that the transaction is expected to be tax-free, and will give IAC shareholders "direct ownership of Match Group."
  • Match Group shareholders will receive one share of stock from the new independent Match Group and $3 per share in consideration, per CNBC. IAC shareholders will receive $3 per share in cash.
  • The transaction is expected to close in the second quarter of 2020.

Bottom line: "We’ve long said IAC is the 'anti-conglomerate' – we’re not empire builders," said Barry Diller, chairman and senior executive of IAC.

  • "We’ve always separated out our businesses as they’ve grown in scale and maturity and soon Match Group, as the seventh spin-off, will join an impressive group of IAC progeny collectively worth $58 billion today."

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