Kurnos: Angie's Takeover To Yield 'Clear Market Leader'

IAC/InterActiveCorp IAC announced Monday after close that it committed to acquiring Angie’s List Inc ANGI for $8.50 per share — a sum $0.25 beneath the initial bid and $0.50 below Benchmark’s estimated fair value — making it a clear win for IAC.

Commenting on the pricing, analyst Dan Kurnos isn’t disappointed.

Exclusive: Analyst's Take

“This effectively amounts to a spin-off of HomeAdvisor, unlocking the significant valuation upside in core IAC we have been talking about in our sum-of-the-parts analysis,” Kurnos told Benzinga. “The potential synergies of $100 to $250 million exceeded our expectations, and we don’t think the high end of the range is that far out of reach.”

The two firms intend to merge into ANGI Homeservices Inc, which Kurnos said positions the new entity to capitalize on a fragmented market as the “clear market leader with significant scale benefits versus competitors.”

Angie’s had announced in November that it was exploring strategic alternatives to “achieve the full potential of our new platform,” and analysts suspected that it would revisit an IAC bid rejected in 2015. Kurnos has long said Angie’s List and its “broken” stock would fare better under IAC.

Angie investors will receive either one share of the new venture or cash of the IAC buyout value.

Angie’s stock was trading up 60.8 percent and IAC 16 percent at the time of publication.

Nick Donato contributed reporting.