Following the news that IAC plan to spin off The Match Group, analysts have been keen to evaluate the worth of the IAC subsidiary.
Bank of America’s wealth management division Merrill Lynch has valued The Match Group at $6.5bn.
This is based on 15x The Match Group’s estimated 2016 EBITDA of $431m.
The investment bank also valued Tinder at $1.35bn.
Barclays, on the other hand, has valued the subsidiary at $5.7bn, adding that Tinder could be potentially worth $2bn on its own.
Since the announcement of the spin off, shares of IAC increased by 5.9% – a record high for the conglomerate, closing at $81.80.
IAC has a market capitalisation of $6.35bn.
The company hopes that an IPO will not only inject new life into The Match Group, but will also help to bring in additional assets to the company.
The IPO is expected to be completed during the fourth quarter of 2015.
Speaking about the decision, Chairman of The Match Group, Greg Blatt, said: “The Match Group is poised for substantial growth in the coming years. The dating industry has come a long way since its inception, but the category remains underpenetrated.
“We believe the combination of our more established businesses such as Match, Meetic, and OurTime, and earlier stage businesses such as Tinder and OkCupid, creates an attractive combination of significant cash flow generation, strong margins and meaningful growth potential.”
In its Q1 2015 report, IAC revealed that general revenue increased by 4% compared to last year, from $740.2m to $772.5m.
For The Match Group, total revenue increased 13% compared to last year, rising from $211.2m to $239.2m – meaning the dating portfolio creates over 30% of IAC’s total revenue.