Media giant IAC is considering relinquishing control of ANGI Homeservices Inc.—the parent of Indianapolis-based Angie’s List—and its online dating service provider Match Group, the company said in a letter to shareholders Wednesday.
Shares in ANGI were down as much as 30 percent Thursday after the news.
“We are considering spinning our two large publicly traded subsidiaries, [Match] and ANGI,” Joey Levin, CEO of IAC, said in a letter. “We don’t yet know where that process will lead—there’s lots of work to be done and details to consider—and we may ultimately choose to spin off both, one or neither. This isn’t just legalese to preserve IAC’s options with an expected outcome in mind–we sincerely haven’t yet decided what’s best.”
According to Bloomberg News, IAC owned 98% of the voting interest in ANGI and 97.5% in Match, as of March.
Levin said a “formal evaluation process” on the possible spin offs will begin soon.
IAC acquired Angie’s List in 2017 and combined it with Denver-based HomeAdvisor to form ANGI Homeservices. The company is based in Colorado but has significant operations in Indianapolis.
Match Group is the parent of several leading dating sites, including Match, Tinder, OkCupid and PlentyOfFish.
IAC previously spun off the online travel site Expedia, HSN TV, Ticketmaster and LendingTree.
“We have done this a lot of times throughout history,” Levin told Bloomberg. “We are not empire builders.”
Brandon Ridenour, CEO of ANGI Homeservices, said the possibility of a spinoff was a natural progression.
“IAC has a long history of incubating and growing companies to great success and we have a great working relationship with IAC,” he said in a written statement. “They have tremendous expertise that is very valuable. This is a natural course for a company that is a part of IAC. ANGI Homeservices will continue to grow with any outcome. If this does happens, it would be a great opportunity and a proof of our maturity, and if we stay as a part of IAC, we will continue to benefit from their expertise.”
The shareholder letter was released the same day that ANGI announced its second quarter earnings. The company reported a profit of $7 million, or 1 cent per share, down from $22.9 million, or 5 cents per share.
The results fell short of analyst’s expectations of 2 cents per share.
Revenue rose 17 percent, to $343.9 million, but missed analyst predictions of $351.2 million.
ANGI shares traded at $9.14 each at midday Thursday, down 27.4 percent.
Company officials said the missed expectations were due in part to troubles with search engine optimization on Google, which drives 40% of the firm’s lead generation.
ANGI CEO Brandon Ridenour told IBJ that ANGI and Angie’s List continue to grow revenue.
“We had record new sales for Angie’s List, and we’re just turning [profitable] on service provider ad sales,” Ridenour said. “This is a big milestone. I’m pleased with the way things are going there.
“We expect the entire [Angie’s List] business to be profitable by the end of this year,” he added. “And we expect sales for Angie’s List to grow next year.”