Match Group, a subsidiary of IAC/InterActiveCorp, will buy
dating site PlentyOfFish for $575 million in cash ahead of its
proposed initial public offering.
Match Group CEO Sam Yagan said that he has followed what he
called consistent growth of PlentyOfFish for over a decade.
"As more people than ever use more dating apps than ever with
more frequency than ever, PlentyOfFish's addition both brings new
members into our family of products and deepens the lifetime
relationship we have with our users across our portfolio," he
added.
Match houses the dating sites and apps Match.com, Tinder and
OkCupid. In late June, the company followed through on a
long-expected plan to pursue an IPO for Match, as the market for
dating sites in the U.S. is booming.
The services are expected to rake in $1.17 billion in revenue
this year, while dating apps are expected to pull in $628.8
million, both up nearly 10% from 2014, according to the research
company IBISWorld. Match Group has about a 22% share of that
market.
Barry Diller, IAC's chairman, isn't breaking up with Match Group
entirely. The company is planning to sell a stake of less than 20%
in the division, which includes fitness and educational businesses
such as the Princeton Review.
Wall Street had been expecting a sale of some kind ever since
IAC in late 2013 put its dating properties in one unit under Mr.
Yagan, the co-founder of OkCupid. He will remain chief executive of
the group after the IPO.
Match has been trying to live up to investors' growth
expectations. The segment reported a 16% jump in paid dating
subscribers in the first quarter, reversing a 12-month stretch of
decelerating growth and marking Match's fastest pace since the
fourth quarter of 2013. It likely got a big boost from the March
launch of Tinder Plus, a pay version of the app.
But that growth came at a cost: Match operating income tumbled
36%, due in part to higher marketing costs for dating services.
The deal for PlentyOfFish is expected to close in the fourth
quarter. The IPO is also expected to be completed then.
Write to Angela Chen at angela.chen@dowjones.com
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