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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."