Source: Business Today
On Monday, May 8, gay dating app Grindr stated that it would go public by means of a merger through a blank-check acquisition firm. Essentially, this deal is valued at $2.1 billion, featuring Raymond Zage, chief executive of Tiga Investments, on two of its spectrums,
Moreover, the app specified that following the merger, its existing shareholders would own 78% of the company. This visibly takes place two years post China’s Kunlun Tech Company divested it for $620 million. The firm went ahead with it owing to concerns over national security of the US. Reports previously stated that Zage held a 41% stake in a consortium taking over Grindr . Though Grindr did not reveal the identities of its shareholders, it is clear that Zage still holds the stake as an investor in Grindr. Zage controls Tiga Acquisition Corp. It is the special purpose acquisition company (SPAC) based in Singapore, that will merge with Grindr.
The details of the deal:
Grindr is set to receive $284 million in cash from Zage’s Tiga. Along with it, a maximum of $100 million in a forward purchase agreement. Both the firms are anticipating their deal requiring an approval of the Committee on Foreign Investment in the US (CFIUS). The committee is known for often scrutinising deals for potential risks to national security. A copy of their merger agreement made public on Monday, May 9 disclosed this. Moreover, it was CFIUS ordering Kunlun to sell Grindr three years ago. This was over concerns over the Chinese government possibly accessing the personal data of the users in the US.
However, authorities could not determine whether CFIUS played a part in Grindr’s decision to look into a sale and merger with the Singaporean SPAC. A US Treasury Department, chairing CFIUS did not acknowledge to request made for comments.
Reports from 2021 specified how Grindr, along with Kunlun provided CFIUS information regarding the transaction. These somehow visibly contradicted revelations to potential investors and Chinese regulators. They informed CFIUS about how James Lu had no previous business connections with a key adviser to Kunlun, despite the investor revelations and Chinese regulatory filings contradicting this. Lu was a Baidu Inc executive previously, and was part of the consortium that purchased Grindr, and is currently its chairman.
On Monday, a familiar source specified that CEO Jeff Bonforte and COO Rick Marini of Grindr are set to to step down from their positions, Moreover, the search for the one replacing Bonforte has already set off. Marini, and Bonforte were both part of investment firm Catapult Capital. The firm competed against Zage and Lu to acquire Grindr prior to reaching a deal to work together.
The same source revealed that Michael Gearon, co-owner of Atlanta Hawks would continue being investment in the company. Notably, he was another significant shareholder who was part of the consortium that purchased Grindr in 2019. Additionally, in an investor presentation, Grindr stated that it has 11 million monthly active users, witnessing a revenue growth of 30% in 2021.
