Report: Angie’s List hires bankers to explore sale

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Shares of Angie’s List Inc. rocketed 22 percent higher Tuesday night after The Financial Times reported that the fast-growing consumer-review service had hired investment bankers to explore strategic options, including a sale.

An Angie’s List spokeswoman said the company had no comment because it does not respond to "rumors." The company’s shares surged $1.73 to $7.80 in after-hours trading.

The Financial Times, which did not name its sources, said Angie’s List had held conversations with prospective buyers. However, the newspaper cautioned that the company “is not wedded to selling itself” and might decide not to pursue a deal.

Indianapolis-based Angie’s List, which went public in November 2011 at $13 a share, has experienced a tumultuous 2014, as performance missed expectations and critics questioned whether its increasing reliance on revenue from service providers—the very companies Angie’s List members rate—tarnished its reputation for unbiased ratings. Service provider revenue from advertising and e-commerce services accounted for 73 percent of the company's $246 million in 2013 revenue.

The stock, which traded as high as $22.62 a year ago, slipped further in July after the company reported an $18.4 million second-quarter loss, far larger than expected. The next month, Angie’s List said it was laying off 97 members of its sales force “as part of a focus on improving salesforce performance and productivity.”

The Financial Times did not identify which investment firm or firms Angie’s List had hired.

Angie’s List, which employs about 2,000 workers, has never turned an annual profit. It could have been profitable in recent years were it not for tens of millions of dollars in marketing expenditures to expand into new markets and grow its membership base. It now boasts more than 2.8 million paid members.

Just last week, the company announced it had increased its financial flexibility by securing a new $85 million loan agreement with TCW Asset Management Co. of Los Angeles.


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