IAC/InterActiveCorp (NASDAQ:IAC) announced Thursday it has agreed to spin off all of its shares of online dating company Match Group (NASDAQ:MTCH)
The transaction is expected to close in the second quarter of 2020 and result in IAC and Match Group becoming two independent thriving public companies.
The transaction, which is expected to be tax free, will give IAC shareholders direct ownership of Match Group while capitalizing IAC to pursue new opportunities and enabling management to focus on undervalued assets within IAC. As a fully independent company, Match Group will benefit from increased strategic flexibility, enhanced trading liquidity, and the eligibility for index inclusion.
"We've long said IAC is the 'anti-conglomerate' – we're not empire builders. 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," said Chairman Barry Diller.
Match shareholders will receive one share of New Match and $3 per share in consideration, while IAC shareholders will receive $3 per share in cash.
IAC said in October it had submitted a proposal to members of Match’s board of directors that would result in the full separation of Match from IAC.
Match has carved out a foothold in the online dating market, largely due to solid growth in its youth-oriented dating app, Tinder. It also includes other dating services like Match, Hinge and OKCupid.
IAC shares galloped $14.25, or 6.4%, to $235.46, while MTCH shares sprang $4.43, or 6.2%, to $75.67
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