Two popular consumer cloud services, Angie's List and HomeAdvisor, are merging to form a new publicly traded (Nasdaq) company, ANGI Homeservices Inc., but users of both services won't know the difference.
The combined business, which will maintain both Angie's List and HomeAdvisor brands, plans to scale up big time to match more homeowners with service professionals in the $400 billion domestic home services market.
The transaction, announced May 2, has been approved by the boards of directors of both companies and is expected to close in the fourth quarter of 2017. The merger gives both companies a much larger set of resources to promote growth.
"This is now the 10th publicly traded company to emerge from what was one company, in 1995, with $48 million in sales and a market capitalization of $201 million—the beginning of IAC," said IAC and Expedia Chairman Barry Diller, creator of Home Shopping Network.
The transaction combines Angie's List's well-known brand and large audience with IAC's home-services category leader, HomeAdvisor. HomeAdvisor owns the industry's largest network of paying, high-quality service professionals and a consumer product driving seven consecutive quarters of domestic revenue growth in excess of 35 percent.
HomeAdvisor CEO Chris Terrill will assume the role of CEO of ANGI Homeservices Inc., whose headquarters will be based at HomeAdvisor's Golden, Colo., location. IAC CEO Joey Levin will also serve as chairman of the board of directors. Thomas R. Evans, current chairman of the board of Angie's List, and Angie Hicks, Angie's List co-founder and CMO, are expected to join the board of ANGI Homeservices Inc.
Under the terms of the agreement, Angie's List stockholders will have the right to elect to receive either one share of Class A common stock of ANGI Homeservices Inc. or $8.50 per share in cash, for each share of Angie's List stock that they own, with the total amount of cash available in the transaction capped at $130 million.
Depending upon the number of Angie's List stockholders electing to receive cash, upon completion of the transaction, IAC will own between approximately 87 percent and 90 percent of the equity value of the combined company.