After more than two years of negotiations, Angie’s List has entered into a definitive agreement to merge with IAC/InterActiveCorp’s HomeAdvisor in a deal that’s valued at more than $500 million. Both brands will be retained and the deal is expected to close in the fourth quarter of this year, with IAC owning between 87 percent and 90 percent of the combined company.
“Both Angie’s List and HomeAdvisor have built impressive businesses based on delivering homeowners and home service professionals incredible value,” said HomeAdvisor chief executive Chris Terrill, in a statement. “We’ve only just scratched the surface of this tremendous market opportunity, given 90 percent of home improvement transactions are still generated via word-of-mouth. By combining HomeAdvisor and Angie’s List’s complementary strengths, the combined company will be able to leverage its joint models and resources to not only accelerate market penetration, but also continued online conversion of that marketplace.”
Terrill will assume the role of CEO of Angie’s List, which will be based out of HomeAdvisor’s Colorado office. Angie Hicks, Angie’s List cofounder and chief marketing officer, is expected to join the board of the new company.
In 2015, IAC approached Angie’s List in a bid to buy the company for approximately $500 million, but was immediately rebuffed by the board. At the time, the deal on the table was for $8.75 per share all-cash, so something must have occurred to cause Angie’s List to accept a lower offer.
Talks about a potential deal actually began in October of 2015, and in a bid to pressure Angie’s List to capitulate, IAC CEO Joey Levin published a letter he had sent to the Angie’s List board. “Our strong preference would have been to work with you on a confidential and cooperative basis. However, we have been unable to develop any meaningful dialogue with you for many months now and were disappointed by your unwillingness to continue discussions with us following our meeting,” he wrote.
In response, Angie’s List acknowledged the letter and said it was “carefully reviewing and evaluating” the proposal while also securing the services of Bank of America Merrill Lynch as its financial advisor and Sidley Austin LLP as its legal advisor.
With the merger, HomeAdvisor is getting one of the top networks used to find service professionals. HomeAdvisor currently lists more than 156,000 providers, while Angie’s List has 55,000. It’s not known how many of those are duplicated across both services. The companies claim that 22 million monthly users visit both sites and that by the end of 2018 they will realize between $100 million and $250 million in annualized synergies.
Shares in Angie’s List rose sharply by 42.78 percent in after-hours trading after closing the day up 0.17 percent at $5.89. IAC’s shares rose as well, closing the day at $84.19 and rising 6.31 percent after hours.