IAC/InterActiveCorp to buy consumer review website operator Angie's List for $500 mn
02 May 2017
US media and Internet company IAC/InterActiveCorp, today struck a deal to buy consumer review website operator Angie's List Inc in a $500-million deal, in order to strengthen its online home contractor services.
The deal will see IAC's HomeAdvisor merging with Angie's List into a new publicly-traded company, to be called ANGI Homeservices Inc.
Under the terms of the deal, Angie's stockholders will receive either one share of Class A common stock of ANGI Homeservices Inc. or $8.50 per share in cash, for each share of Angie's List stock that they own.
The offer represents a premium of 44.3 per cent to Angie's Monday close.
Post closing, IAC will own between 87 per cent and 90 per cent of the combined company.
The transaction has been approved by the boards of both companies, and is expected to close in the fourth quarter of 2017.
The combined business, which will maintain both Angie's List and HomeAdvisor brands, will offer homeowners with service professionals in the $400 billion domestic home services market.
Angie's List is a Ohio-based website containing crowd-sourced reviews of local businesses.
Angie's List members grade companies using a report-card-style scale, which ranges from A to F. Each company has its own page, which is composed of a description of its business along with the customer reviews. The aggregate grade is drawn from the combined reviews and grades given to the businesses from the consumers.
The transaction will combine Angie's List's well-known brand with IAC's home services category leader HomeAdvisor.
HomeAdvisor has the industry's largest network of paying, high quality service professionals and a consumer product driving seven consecutive quarters of domestic revenue growth in excess of 35 per cent.
The combined company will have a target five-year compound annual growth rate of revenue of 20 to 25 per cent, and a target Adjusted EBITDA margin that will ramp to approximately 35 per cent.
''This is now the 10th publicly traded company to emerge from what was one company, in 1995, with $48 million in sales and a market capitalization of $201 million – the beginning of IAC. Today, the equity value of the companies created is in excess of $43 billion, with a compounded annual return of 13.3 percent,'' said Barry Diller, chairman of IAC and Expedia, Inc.