• by Thom Forbes  @tforbes, May 2, 2017

Angie’s List, the subscription-based service that has carried reviews of home service suppliers such since 1995, is being acquired by an upstart rival, IAC’s HomeAdvisor, in a deal valued at more than $500 million. The two companies will be combined into a new, publicly traded entity called ANGI Homeservices, Inc.

“New York-based IAC, which is controlled by media mogul Barry Diller, will own between 87% and 90% of ANGI Homeservices Inc., depending on how many Angie's List shareholders take cash instead of stock in the combined company,” according to the AP on ABCNews.com. 

The Indianapolis-based Angie's List, which was co-founded by Angie Hicks with venture capitalist William S. Oesterle, “has made a name for itself as a trusted source of reviews for plumbers, electricians and painters, attracting more than five million members and 55,000 service professionals to its platform. However, it has struggled to compete with free reviews sites like Yelp,” writes Lauren Gensler for Forbes. “Last year, it elected to knock down its longtime paywall, with CEO Scott Durchslag calling it a ‘barrier’ that had stunted the company's growth.”

“Angie’s List continued to struggle, however,” reports Catherine Shu for TechCrunch, pointing out that “it had difficulty finding its footing against newer rivals like Amazon Home Services, Facebook, Thumbtack, Handy, and Porch. The growth of its user base stagnated and its quarterly revenue over the last two years has been lackluster.”

The Golden, Colo.-based HomeAdvisor “is like an Uber for such professionals with more than nine million homeowners served and 156,000 service providers. IAC hopes that by putting them together it can draw more users to the fast-growing service,” writes Joshua Jamerson for the Wall Street Journal, which broke news of the deal yesterday. “Shares of Angie’s List rallied more than 40% in after-hours trading,” after the story was posted, Jamerson writes. 

“The deal combines two sets of consumers and service providers into one online service — a big reason why IAC pursued the transaction, said Chief Executive Officer Joey Levin,” writes Jing Cao for Bloomberg.

“What Angie’s List adds is fuel on both sides of the marketplace,” Levin tells Cao. “That improves that service experience — consumers get faster and higher-quality responses.”

“Levin wants to turn ANGI Homeservices into the next large on-demand online marketplace. Currently, the combined businesses only have 4% of the market for home services,” Cao continues.

The deal, expected to close in the fourth quarter, is the end of an era for Indianapolis' best-known technology company,” write James Briggs and Holly V. Hays for IndyStar.com, pointing out that the new company will be headquartered in Golden and led by HomeAdvisor CEO Chris Terrill. 

“IAC had been looking at buying Angie's list for some time,” write Reuters’ Aishwarya Venugopal and Liana B. Baker, and “talks heated up after Angie's List announced in November 2016 that it was exploring strategic options,” Terrill tells them in an interview.

“Once their sales process got started, we started really looking at the opportunities of putting our marketplaces together,” says Terrill. 

“Both Angie’s List and HomeAdvisor have built impressive businesses based on delivering homeowners and home service professionals incredible value,” Terrill says in a new release about the transaction. “We’ve only just scratched the surface of this tremendous market opportunity, given 90% of home improvement transactions are still generated via word-of-mouth.”

“Since 1995, Angie’s List has set the bar for enabling quality home services experiences for millions of consumers and service pros. I’m thrilled that IAC and HomeAdvisor share our vision for what’s possible when it comes to the home services category’s massive potential,” says Hicks, who has been CMO of Angie’s List. “Together, we will relentlessly elevate home services experiences for an even broader base of customers.”

IAC CEO Levin will be chairman of the new company. The chairman of Angie's List, Thomas R. Evans, will be on the new company's board, as will Hicks.

A conference call to answer questions about the deal on will start at 8:30 a.m. ET this morning. The live audiocast and replay will be open to the public at http://www.iac.com/Investors.