IAC Considers Spinning Off Angi, a Leading Home Improvement Platform
In a surprise move, IAC (InterActiveCorp) announced that it is exploring the possibility of spinning off Angi, a popular online platform that connects consumers with local home improvement service providers. This news comes as part of IAC’s third-quarter earnings release, which also included a breakdown of results from its Care.com segment.
Angi’s Strong Performance
Despite a 16% year-over-year decline in revenue to $296.7 million during the third quarter, Angi remains a profitable and healthy business. IAC CEO Joey Levin attributed the revenue drop to reduced sales and marketing spend, which led to fewer service requests and lower acquisition of new professionals. However, Levin expressed confidence in Angi’s economic foundation, stating that the company is on a path to resume revenue growth.
Potential Spinoff Benefits
If IAC decides to move forward with the spinoff, its 85% stake in Angi would be distributed to shareholders. Levin believes that Angi’s best chance of realizing its full potential lies in operating as a standalone company. This move would allow Angi to focus on its core business, unencumbered by the parent company’s influence.
IAC’s History of Incubating and Spinning Off Businesses
IAC has a proven track record of incubating businesses and spinning them off into separate companies. This strategy has been successful with companies like Expedia, Ticketmaster, and LendingTree, among others. In 2019, IAC completed the spinoff of Match Group, which owns popular dating services like Tinder, Match, and Hinge.
Care.com Segment Results
IAC also released results from its Care.com segment, which it acquired in 2019 for nearly $500 million. Care.com revenue declined 6% year over year to $95.7 million during the third quarter. However, the company generated adjusted EBITDA of $46 million over the last 12 months.
What’s Next?
While there is no specific timeline for the potential spinoff, IAC expects a transaction to take place by the end of its second quarter if it decides to move forward. As Angi continues to strengthen its economic foundation, shareholders can expect significant upside in the business.
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