By By Harshita Mary Varghese
(Reuters) – 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 (NYSE:MDP).
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 eliminates 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 said it would break out results for in-home care services platform Care.com as its own reporting segment in the fourth quarter.
