Match Group Inc. on Monday laid out the terms of its long-awaited debut on Wall Street.
The online dating company, owner of apps and sites including Tinder, Match.com and OkCupid, said it plans to raise up to $536.7 million in its initial public offering, valuing the company at up to $3.4 billion.
That is about $800 million less than some analysts had expected.
“The IPO market has not been ideal, but I think they want to drum up a lot of interest” with a low price, said Daniel Kurnos, senior equity analyst at the Benchmark Company.
Match said in a filing that it would sell 33.3 million shares at between $12 and $14 a piece. Underwriters will have the option to buy up to 5 million additional shares. The company plans to list its shares on the Nasdaq Global Select Market under the symbol “MTCH.”
Barry Diller’s
IAC/InterActiveCorp.—Match’s parent company—is seeking to cash in on the booming market for online dating.
Match, which counts 59 million monthly active users, reported $888.3 million in revenue in 2014, up about 11% from the previous year, according to its filing with the Securities and Exchange Commission.
The filing reveals details of Match’s strategy to generate more revenue from its online dating properties. The company intends to “meaningfully increase” the number of ads it sells on Tinder. Match said Tinder’s “strong user engagement”—9.6 million daily active users who spend an average of 35 minutes a day on the app—“makes it a very attractive platform for advertisers.”
Recent sharp stock-market swings have
deterred some firms from pursuing public offerings. French music-streaming service Deezer recently delayed its IPO citing “market conditions.” Online-dating platform Zoosk Inc. also withdrew its plans for an initial public offering earlier this year after more than 12 months of delays.
On Friday, payments startup Square Inc. sought a valuation of about $3.9 billion, far less than the $6 billion price tag put on the firm a year ago.
Earlier this year, Avid Life Media Inc.’s AshleyMadison.com, a dating website for infidelity seekers, announced that it hoped to raise $200 million in an IPO in London. In the meantime, the site was the subject of a high-profile hacking, and user data flooded the Internet. Analysts say
the breach hurt its chances of floating shares soon.
Match Group made up about a third of IAC’s overall revenue in the third quarter. IAC will still own 86% of Match’s shares outstanding, but with its separation from the company, IAC will be led by its search and applications unit, home of sites like About.com and Ask.com. Other remaining well-known properties include the Daily Beast, Investopedia, CollegeHumor and Vimeo.
Most search businesses aren’t exactly thriving. “Ones that are not named Google have had their fair share of questions and concerns,” said S&P Capital IQ analyst Scott Kessler.
Part of Match’s success has come from launching new apps and features, such as the swiping right or left that has become Tinder’s signature. Tinder makes money from the fee it charges users—up to $19.99 a month—for special features such as taking back swipes and matching outside of a 100-mile radius. According to the filing, Tinder had 583,000 paid members as of the end of September, six months after the launch of its premium service.
OkCupid is free to use but has paid memberships with extra features. Match.com charges users a monthly fee.
IAC/InterActiveCorp would retain control of more than 98% of voting rights after the IPO under its ownership of Class B shares.
Match also owns other non-dating brands such as the Princeton Review.
Match said it intends to use the IPO proceeds to pay down debt owed to IAC.
The underwriters for the IPO include J.P. Morgan, Allen & Co., Bank of America Merrill Lynch, Deutsche Bank Securities, BMO Capital Markets, Barclays, BNP Paribas, Cowen and Company, Oppenheimer & Co., PNC Capital Markets LLC, Société Générale and Fifth Third Securities.
