Popular dating services provider The Match Group, a subsidiary of IAC/InterActiveCorp IACI, will be launching its IPO for the leading dating site Match.com and others. The IPO is expected to be completed by the fourth-quarter of this year. Per the announcement, The Match Group is likely to issue less than 20% of its common stock.
Match.com, founded in 1993, is an online dating service with presence in over 25 countries and is available in eight languages. Last year, Match.com launched its mobile app named, ‘Stream’ that uses location data for finding matches (similar to IAC’s other mobile dating app, Tinder).
In the last reported quarter, Match Group reported revenues of $239.2 million (31% of IAC revenues), marking an increase of 13% on a year-over-year basis. According to media reports, Match Group expects its revenues to grow 18% in 2015 to $1.24 billion.
Management believes that this IPO can prove to be a significant milestone in the growth of The Match Group, given rising demand in the online dating industry.
According to a survey report from The Wall Street Journal (Feb 2015), in a 30 day time period, around 2.36% of adults in the U.S. (roughly 5.6 million) had used dating sites. Market research firm, GfK MRI suggests that this reflects more than 100% growth over the last 5 years. A 2014 report from IBISWorld forecasts the U.S. dating service industry to grow at 4.2% per annum between 2014 and 2019, with the market reaching $2.7 billion in 2019.
Given the scope for growth we believe that this IPO can prove to be a boon for IAC. However, competition from other players like Spark Networks, Inc. LOV and even social media giants like Facebook, Inc. FB remains a concern.
IAC has a Zacks Rank #3 (Hold). A better-ranked stock is Blue Nile Inc. NILE with a Zacks Rank #2 (Buy).
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