IAC Unveils Plans for Angi Spin-Off and Leadership Changes

IAC Announces Spin-Off of Angi Stake

In an exciting move, IAC (NASDAQ: IAC), a well-known name in the media and internet sector, revealed its decision to fully spin off its stake in Angi Inc. (NASDAQ: ANGI), which is recognized as a leading digital marketplace catering to home services. The company, valued at around $770.77 million, boasts an impressive gross profit margin of 95%. This transition will grant IAC shareholders direct ownership of Angi, marking a significant step towards Angi's independence.

Leadership Changes with Joey Levin

As part of this strategic shift, IAC is also reconfiguring its leadership structure. Joey Levin, who has been steering IAC as CEO, will now transition into an advisory role and take up the important position of Executive Chairman at Angi. He will collaborate closely with Angi’s CEO, Jeff Kip, to shape the future of the platform.

Barry Diller’s Confidence in Leadership

Barry Diller, IAC's Senior Executive and Chairman, praised Levin for his instrumental role in IAC's success over nearly ten years. Diller expressed enthusiasm about Levin's leadership potential in guiding Angi’s growth journey as an independent organization.

Details of the Spin-Off

This spin-off is designed as a tax-free transaction and is anticipated to finalize in the first half of 2025, with a target date set after March 31, 2025. The separation will be contingent on certain conditions, including the endorsement by the IAC Board of Directors and a favorable tax opinion. This move is expected to enable both IAC and Angi to focus more closely on their unique business strategies and explore broader growth opportunities.

Future Financial Expectations

Both companies have confirmed their financial outlook for the fourth quarter of the following year, aligning with previous predictions. IAC and Angi plan to share their fourth-quarter financial results after market closure on a designated day, followed by a joint conference call to discuss the outcomes. Analysts foresee a positive trend, predicting net income growth for the year, with recent earnings estimates being revised upwards.

ANGI HomeServices Spin-Off Consideration

In a related development, ANGI HomeServices is looking into a spin-off from its parent company, IAC, amid discussions surrounding their financial performance. IAC currently holds an approximate 85% stake in ANGI. This was highlighted during ANGI's recent third-quarter announcement, which disclosed a revenue decline exceeding 15%, even as their international segment, specifically in Europe, showed resilience with a 15% year-on-year revenue increase.

Market Reactions and Adjustments

Prominent financial institutions, including RBC Capital Markets, Citi, and Goldman Sachs, have reassessed their outlook on ANGI HomeServices. Adjustments include reductions in stock price targets and a downgrade of ANGI's stock rating from Buy to Neutral by Goldman Sachs. The discussed spin-off of ANGI aims to simplify IAC's portfolio and sharpen its focus on its leading assets. While KeyBanc Capital Markets lowered its price target for ANGI to $2.00 from $3.00, they continue to maintain an Overweight rating, indicating confidence in the stock's potential.

Frequently Asked Questions

What is the purpose of IAC's spin-off of Angi?

The spin-off aims to provide IAC shareholders with direct ownership of Angi, allowing both companies to focus on their distinct business strategies and growth opportunities.

Who is Joey Levin in relation to Angi?

Joey Levin has transitioned from being the CEO of IAC to becoming the Executive Chairman of Angi, where he will collaborate with Angi's CEO on strategic direction.

When is the spin-off of Angi expected to occur?

The spin-off is projected to conclude in the first half of 2025, contingent upon the approval of the IAC Board and a tax opinion.

How has the market reacted to the news about Angi?

Financial firms have made revisions to their stock outlooks for Angi, adjusting price targets and stock ratings based on recent performance and future expectations.

What is the current status of ANGI HomeServices?

ANGI HomeServices is considering a spin-off from IAC amid a revenue decline, although it reported growth in its international segment, particularly in Europe.

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