Dating app Tinder is headed for an IPO.
IAC/InterActiveCorp plans to spin off its Match Group dating division into another public company in the fourth quarter.
Tinder, based in West Hollywood, was founded and incubated within Match Group and remains majority owned by New York’s IAC. Other Match Group holdings include dating companies Match.com, OkCupid and Chemistry.com.
IAC said it would sell a 20 percent stake in Match Group as part of the offering. Pricing and volume of shares have also not been announced. Match Group revenue rose 11 percent last year to $897 million, with adjusted Ebitda of $267 million.
IAC has not disclosed Tinder’s financials, but the dating app has been working to turn itself into a revenue generating property recently, by adding paid subscription features and experimenting with advertising. Tinder is reportedly Match Group’s most highly valued property, so its revenue would weigh heavily on the new company’s valuation.
Perhaps in anticipation of the impeding offering, IAC in recent months has begun to fill Tinder’s C-suite with executives who bring corporate pedigrees. Chris Payne, a former vice president at eBay and Microsoft, assumed chief executive responsibilities in March and Hugh Williams, also a former vice president at eBay and a former manager at Microsoft, became vice president of engineering in early June.
This isn’t the first time IAC has spun off companies. IAC made initial public offerings of several of its companies in 2008, including LendingTree Inc. and vacation package company Interval Leisure Group Inc.
“As many know from our actions over the last 20 years, I’m not a believer in simply agglomerating assets in perpetuity,” Barry Diller, IAC’s chairman, said in a statement. “I've long felt that as entities grow into size and maturity it’s healthy to give them separation and independence from a mother church.”
Tinder representatives could not be reached for comment.
Match Group Chairman Greg Blatt said the new company has the right mix of mature and growing businesses to be a hit.
“The dating industry has come a long way since its inception, but the category remains underpenetrated,” Blatt said in a statement. “We believe the combination of our more established businesses such as Match, Meetic and OurTime, and earlier stage businesses such as Tinder and OkCupid, creates an attractive combination of significant cash flow generation, strong margins and meaningful growth potential.”
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