Technology holding company IAC/InterActiveCorp (NASDAQ: IAC) has announced that it intends to fully spin off its Match Group unit (NASDAQ: MTCH). Last October, IAC submitted a proposal to members of Match’s board of directors that would result in the full separation of Match from IAC. The spinoff has now been approved by the boards of both companies, but still requires the approval of shareholders, among other stakeholders.
IAC and Match Group will become two independent public companies. 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.”
The spinoff gives IAC shareholders direct ownership of Match Group stock. Match shareholders will receive one share of New Match and $3 per share in consideration, while IAC will receive $3 per share in cash. 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.
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. 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. IAC expects a tax-free separation to occur before the end of June 2020.
Shares of both Match Group and IAC rallied on the news. Shares of Match jumped more than 5 percent in premarket trading while shares of IAC rose about 1 percent. Match Group shares have gained 66.6 percent this year while IAC shares are up 24.6 percent. Match Group includes dating services Match, Tinder, Hinge, Plenty of Fish, and OKCupid. IAC still owns Angie’s List, digital video website Vimeo, and media websites, including The Daily Beast and College Humor.