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IAC buying Angie’s List, will combine with HomeAdvisor into new public company
The two companies will create a home services lead-gen powerhouse.
IAC is buying Angie’s List and will combine it with its own home services lead-gen site, HomeAdvisor, in a deal worth in excess of $500 million. The merged entity will then be spun out as a new public company: ANGI Homeservices Inc.
IAC had been seeking to acquire Angie’s List since about November 2015 for roughly the same price. Angie’s List’s board initially resisted the takeover. However, Angie’s List’s growth had stalled, and the company had come under increasing pressure from activist investors. The deal is expected to close later this year, with HomeAdvisor’s CEO Chris Terrill becoming the new CEO of the new entity.
Angie’s List and HomeAdvisor were essentially direct competitors in the massive home services market. Reportedly, both consumer brands will continue to exist.
Angie’s List was founded in 1995 and began as a Consumer Reports-style membership-based subscription service, offering reviews of local home services professionals. It went public in 2011 but struggled to grow under competitive pressure from free rivals such as Yelp, HomeAdvisor and Thumbtack. In an effort to boost consumer traffic, the site adopted a freemium model in 2016.
HomeAdvisor began as ServiceMagic and was acquired by IAC in 2004. In 2012, the site was rebranded and relaunched as HomeAdvisor. The company has been doing lots of consumer advertising to build its brand and has expanded into international markets.
HomeAdvisor had revenues of nearly $500 million in 2016 and was one of IAC’s most successful business units. Angie’s List had revenues of just over $320 million for the full year 2016.
Buying Angie’s List removes a competitor from the market and improves coverage for both sites.