June 25, 2015 / 12:20 PM / 5 years ago

Diller's IAC woos investors with IPO for Match dating sites

(Reuters) - Barry Diller is looking for love on Wall Street.

The media mogul’s IAC/Interactive Corp IACI.O said it was planning to list its dating business, which includes the popular dating site Match.com and mobile app Tinder.

Investors cheered the move - IAC shares jumped 7 percent to a record high - even though an IPO was long expected after the company brought its dating services under one roof last year and named it Match Group.

“I’ve long felt that as entities grow into size and maturity it’s healthy to give them separation and independence from a mother church,” said Diller, IAC’s chairman.

Diller, however, will retain control of Match after the IPO, which is expected by the end of this year. The company plans to sell only a fifth of the group in the IPO.

IAC did not give any indication of how much it plans to raise from the offering.

“We value the whole Match Group at $5.7 billion,” Barclays analyst Chris Merwin said, adding that Tinder could be worth $2 billion on a standalone basis.

IAC has a market capitalization of $6.35 billion.

IAC’s search business is its largest but the dating unit is seen as the crown jewel of Diller’s conglomerate, driving strong results for the past few quarters.

Dating sites have drawn people their instant messaging, photosharing and geolocation services. About 31 million Americans have used a dating site or app, according to a 2013 Pew Research Center study.

IPOs in the dating business have been rare, but Ashley Madison, an online dating agency for cheating spouses, said in April it was looking to go public this year.

IAC also said its vacant CEO post would be filled by Joey Levin, former head of the company’s search & applications business, which includes brands such as Ask.com, About.com and Investopedia.

The company also said Chief Financial Officer Jeff Kip was resigning to pursue other interests.

Match.com, IAC’s first matchmaking service, was launched in 1995 and is now present in 24 countries.

Tinder, a free dating app, has also been a huge hit but analysts have said it could cannibalize profits at IAC’s paid services as people under the age of 35 - who generally drive dating trends - tend to prefer free services.

The Match Group also houses services such as Meetic, OkCupid and OurTime, its online education business The Princeton Review and fitness site and app DailyBurn.

Editing by Saumyadeb Chakrabarty and Sayantani Ghosh

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