Angie’s List is a popular website where you can find freelance home improvement specialists—like plumbers and carpenters, etc—and its biggest online rival is a website called HomeAdvisor. Well, it looks like the two will no longer be in direct competition as HomeAdvisor’s parent company, IAC, has just bid to buy Angie’s List. The company is offering shareholders of Angie’s List the option of $8.50 cash per share on their existing investment or, of course, new stock in the combined company.
This combined company will be called ANGI Homeservices. Available cash is capped, however, at $130 million. When the deal is completed, then, IAC will own between 87 and 90 percent of the equity of the new company.
Angie’s List co-founder Angie Hicks, who is also the company’s chief marketing officer, is expected to join the board at ANGI Homeservices, as is Angie’s List chairman Thomas R. Evans.HomeAdvisor CEO Chris Terrill will become the CEO of the combined company.
In a statement, Terrill says, “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,.”
The combined brands, according to IAC, will have “annualized synergies” bewteen $100 and $250 million nearing the end of next year.
HomeAdvisor chief technology officer Brandon Ridenour, comments, too: “Lots of their traffic bounces off the initial page. We think we can leverage our innovation and matching technology to help more of those homeowners have a successful outcome on that visit. Synergies are both cost avoidance and improved monetization.”
This new company will boast a very large presence in Indiana, but it may also result in as many as 1,567 job cuts at Angie’s List.
Ridenour rebuts, though, that HomeAdvisor does have a plan to hire “hundreds and hundreds” of brand new employees. He comments that the plan is to keep both brands intact with support from just one management team and the same technology resource.
Ridenour notes, “While there will be two distinct consumer brands, we think the long term of the company is a unified operation. When a service professional comes to us, we want to help them have a presence with both (brands).”