IAC and Match Group are breaking up.
Continue Reading Below
The media and internet company announced Thursday morning that it will fully separate its Match Group unit, which owns dating apps Match, Tinder, OKCupid and Plenty of Fish.
Shares of both Match Group and IAC rallied on the news.
IAC shareholders will have direct ownership of Match Group after the separation, and receive an additional $3 a share cash in consideration. Cash saved if investors opt to take their payout only in Match shares will go to IAC, and holders of all classes of IAC shares will receive equivalent interest in the new Match and the post-spinoff IAC.
"We've long said IAC is the 'anti-conglomerate' – we're not empire builders,” Chairman Barry Diller said in a statement. “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."
IAC expects a tax-free separation to occur before the end of June 2020. Following the deal's closing, IAC CEO Joey Levin will initially serve as executive chairman of Match Group and IAC finance chief Glenn Schiffman will serve on the board of directors.
As part of the deal, Match Group will buy two buildings in Los Angeles that are occupied mostly by Tinder, paying $120 million in stock.
Match Group was sued by the Federal Trade Commission in September over claims that it used “fake accounts created by fraudsters” to lure new paying members to Match.com between 2013 and the middle of 2018. The FTC alleged 500,000 paying members signed up after receiving notifications that they had a potential love connection on the app.
Match Group has denied the claims, saying they are filled with “completely meritless allegations supported by consciously misleading figures.”
Match Group shares have gained 66.6 percent this year while IAC shares are up 24.6 percent. The S&P 500 is higher by 27.3 percent.