IAC (NASDAQ: IAC) said it was exploring a spin-off of its majority stake in home services unit Angi after the internet holding company beat third-quarter revenue expectations on Monday thanks to steady ad demand for its biggest business, Dotdash Meredith.
IAC owns an 85% stake in Angi, which has a market value of about $1.25 billion. Angi operates a digital platform that connects home service professionals with consumers for tasks ranging from repair work to remodeling of homes.
IAC bought ‘Angie’s List’ in 2017 in a $500-million deal and later merged it with ‘HomeAdvisor’ unit to create the company re-branded in 2021 as Angi.
Angi accounts for nearly a third of IAC’s revenue, making it the company’s second-largest sales stream. But revenue at Angi has dropped for seven quarters as demand for its services waned because of lower service requests and as it eliminated low-margin revenue streams that were acquired using paid marketing.
In the three months to September, Angi’s revenue fell 16% to $296.7 million.
Angi’s potential split would be the tenth standalone public company to fully spin off from IAC, which has a history of building businesses and later splitting them into separate companies. It has spun off its stake in the likes of video streaming platform Vimeo (NASDAQ: VMEO) and dating apps operator Match Group (NASDAQ: MTCH).
“Angi’s economic foundation continues to strengthen, and we suspect that Angi’s best shot at realizing that upside to the benefit of our shareholders may be as a standalone company,” IAC CEO Joey Levin said.
IAC’s revenue came in at $938.7 million in the third quarter, above LSEG compiled analysts’ estimates of $922.2 million.
Digital revenue at Dotdash Meredith, which owns brands including Investopedia and the Food & Wine magazine, rose 16% to $246.4 million – its biggest quarterly growth since the merger between Dotdash and Meredith in 2021.
IAC (NASDAQ: IAC) said it would break out results for in-home care services platform Care.com as its own reporting segment in the fourth quarter.
