Dating app company Bumble Inc. (NASDAQ: BMBL) will be acquired by newly formed Ithaca Holdings in a $1.3 billion deal, taking the company private and delisting it from public markets.
According to an official statement released on Monday, Ithaca Holdings has offered $6.05 per share for the acquisition. Bloomberg reported on Monday that Bumble Inc. (NASDAQ: BMBL) and Ithaca Holdings had entered into advanced negotiations regarding the sale. The transaction price represents a 138% premium over Bumble's closing price last Friday, the final trading day before Bloomberg and other media outlets revealed the potential acquisition news.
Following the completion of the deal, Bumble's headquarters will remain in Austin, and its two major offices in London and New York will continue to operate.
This transaction marks a major turning point in Bumble's fortunes. When the company went public five and a half years ago, it was valued at as much as $14 billion. The app was founded in 2014 by Whitney Wolfe Herd, co-founder of Tinder, with the core premise that only women could initiate conversations. But like many of its peers in the dating app industry, Bumble has struggled with declining user numbers as young people grow weary of online dating and increasingly prefer to meet others through offline activities and other means.
In August of this year, Bumble scrapped its signature "women make the first move" mechanism, the latest move by the platform to boost user engagement. The company also launched an AI-powered smart assistant that same year, acting as an online matchmaker to offer users a new dating experience distinct from simply swiping through profiles.
Herd stated in the announcement that she will "continue to be deeply involved in Bumble's operations."
Trading in Bumble shares was halted before the news was announced. Spurred by reports of the privatization negotiations, the stock surged 50% on Monday, closing at $3.80, marking its largest single-day gain since the company's listing on February 11, 2021.
Bloomberg reported in March that Ithaca Holdings was established earlier this year, co-founded by Sequoia Capital partner Ravi Gupta and former Meta chief revenue officer John Hegeman. The firm plans to acquire at least one public or private company and inject new technology resources, including artificial intelligence, into it.
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