Match Group to Buy Dating Site PlentyOfFish for $575 Million

Match Group, a subsidiary of IAC/InterActiveCorp, will buy dating site PlentyOfFish for $575 million in cash ahead of its proposed initial public offering.

Match Group CEO Sam Yagan said that he has followed what he called consistent growth of PlentyOfFish for over a decade.

"As more people than ever use more dating apps than ever with more frequency than ever, PlentyOfFish's addition both brings new members into our family of products and deepens the lifetime relationship we have with our users across our portfolio," he added.

Match houses the dating sites and apps Match.com, Tinder and OkCupid. In late June, the company followed through on a long-expected plan to pursue an IPO for Match, as the market for dating sites in the U.S. is booming.

The services are expected to rake in $1.17 billion in revenue this year, while dating apps are expected to pull in $628.8 million, both up nearly 10% from 2014, according to the research company IBISWorld. Match Group has about a 22% share of that market.

Barry Diller, IAC's chairman, isn't breaking up with Match Group entirely. The company is planning to sell a stake of less than 20% in the division, which includes fitness and educational businesses such as the Princeton Review.

Wall Street had been expecting a sale of some kind ever since IAC in late 2013 put its dating properties in one unit under Mr. Yagan, the co-founder of OkCupid. He will remain chief executive of the group after the IPO.

Match has been trying to live up to investors' growth expectations. The segment reported a 16% jump in paid dating subscribers in the first quarter, reversing a 12-month stretch of decelerating growth and marking Match's fastest pace since the fourth quarter of 2013. It likely got a big boost from the March launch of Tinder Plus, a pay version of the app.

But that growth came at a cost: Match operating income tumbled 36%, due in part to higher marketing costs for dating services.

The deal for PlentyOfFish is expected to close in the fourth quarter. The IPO is also expected to be completed then.

Write to Angela Chen at [e-mail]

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