IAC to Sell Care.com for $320M
Barry Diller's IAC is nearing a deal to sell its portfolio company Care.com to a private equity firm for around $320 million, according to the WSJ. The transaction represents a classic sell-side PE deal in the consumer and tech services space.
IAC originally acquired Care.com in February 2020 for an enterprise value of approximately $500 million. The deal followed a public controversy over the platform's vetting of caregivers, which had led to the resignation of its founder and CEO. Under IAC's ownership, Care.com underwent a significant overhaul, which included renewing its brand, upgrading its technology, and expanding into new verticals such as senior care, pet care, and housekeeping. IAC's stated goal was to apply its marketplace playbook to a large, fragmented family care market estimated to be worth over $300 billion. The current $320 million sale price to an affiliate of Pacific Avenue Capital Partners represents a significant discount to IAC's initial investment. The divestiture is a key part of IAC's strategy to streamline its portfolio, monetize non-core assets, and sharpen its focus on its investments in People Inc. and MGM Resorts. Pacific Avenue Capital Partners is a private equity firm specializing in corporate carve-outs within the middle market, making the Care.com acquisition a direct fit for its investment thesis. The firm will take Care.com, which is reportedly profitable, and operate it as a standalone company. [cite: 2,
