IAC Plans to Spin Off Match Group

Match Group
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IAC spins off Match Group

IAC has announced its plan to spin off its most profitable company, Match Group, to create “two independent public companies,” according to a company statement.

Match Group is a publicly traded company and owns a suite of star dating apps like Tinder, PlentyofFish, Hinge and OkCupid among others, but IAC is still Match Group’s majority owner (with 80 percent of Match Group’s holdings). According to Tech Crunch, when the spin-off occurs, IAC says it would distribute its Match Group shares to IAC stockholders, which means IAC shareholders would have shares in both companies.

The move would allow Match Group to become a fully separate, independent company.

Match Group’s dual class stock structure would also potentially be eliminated, creating a single-class stock. However, the spin-off proposal is not a done deal. According to Tech Crunch, IAC says it still needs to be approved by its board of directors as well as Match Group and IAC stockholders.

IAC CEO Joey Levin said in a statement: “IAC is confident that the proposal communicated to the Match Group special committee provides strong footing for Match Group to begin its journey as a thriving, independent company.”

Notably, shares of IAC increased .8% and Match Group shares slid 2.5% after the news was shared. This doesn’t put much of a damper on Match Group’s overall performance however, thanks to the growth of star dating app Tinder. The company outperformed earnings expectations in the second quarter, and its stock rose 70 percent this year.

Spinning off a profitable business isn’t a new move by IAC. The company has also spun off other successful companies over the years, including Expedia, HSN, Ticketmaster, Interval and Lending Tree, according to CNBC.

Barry Diller (head of the IAC conglomerate) told Forbes in a feature in their “Forbes 400” issue that this move would free the company up for pursuing new innovations. “Spinning off Match is a process of renewal in that IAC the company gets to start inventing again. We are … shrinking in order to grow again … shrinking with $5 billion or so of cash,” said Diller.

Diller has built an empire, starting in the mid-nineties when he transitioned from the entertainment world to the Internet and tech industries. From 1995 until now, IAC has spun off assets worth $70 billion, and has returned 14% annually. (Forbes estimates the cost at about $12 billion.)

There is no news yet on the timeline of this move, only that shareholders and the board need to approve it.