Gay dating app Grindr has announced plans to go public through a merger with Tiga Acquisition Corp, a so-called “blank check” company, in a deal worth $2.1 billion.
Founder of the special purpose acquisition company (SPAC), Tiga Investments CEO Raymond Zage, is understood to be involved on both sides of the transaction, with previous reports stating that he holds a significant stake in Grindr.
Grindr said that existing shareholders would own 78% of the company following the merger. The company did not disclose the identities of those shareholders, but unnamed sources continue to name Zage as an investor.
Under the terms of the deal, Grindr will receive a $284 million cash payment from Tiga as well as up to $100 million in a forward purchase agreement.
According to a copy of the merger agreement, Grindr and Tiga expect clearance from the Committee on Foreign Investment in the United States (CFIUS) will be required, due to past events concerning Grindr’s ownership.
CFIUS ordered China’s Kunlun Tech Co to sell Grindr in 2019, citing security concerns over the personal data of US users. This past interest in the company could be reignited by new developments.
The deal values Grindr at 27 times its adjusted 2021 earnings before interest, taxes, depreciation and amortization of $77 million, which is significantly higher than the trading prices of rival dating companies. In an investor presentation yesterday, Grindr said that it has 11 million monthly active users and that revenue grew by 30% last year.