Grindr Private Deal: Billionaire Investor Eyes Takeover
- Billionaire George Raymond Zage III and James Lu, majority shareholders of Grindr, have raised $1 billion in preliminary and conditional debt financing as they explore a buyout of...
- George Raymond Zage III and james Lu have secured $1 billion in debt financing to potentially buy out Grindr, valuing the company at $3 billion.
- The loan supports a potential privatization of the company at a minimum of $15 per share, as detailed in an October 14th SEC filing.
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Grindr Buyout: Zage and Lu Secure $1 Billion Financing
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Billionaire George Raymond Zage III and James Lu, majority shareholders of Grindr, have raised $1 billion in preliminary and conditional debt financing as they explore a buyout of the New York-listed firm. The deal would value the LGBTQ dating app at $3 billion.
What Happened?
George Raymond Zage III and james Lu have secured $1 billion in debt financing to potentially buy out Grindr, valuing the company at $3 billion. This move comes after reports of share sales by SeaTown, a Temasek-linked investment firm, which reportedly seized shares from a Grindr shareholder and sold them on the open market.
The Buyout Details
The loan supports a potential privatization of the company at a minimum of $15 per share, as detailed in an October 14th SEC filing. While the lender hasn’t been officially named, Traffic Lights reported discussions with Fortress Investment Group. Zage indicates the deal could close before year-end if their shareholding reaches 90%.
“We filed a 13D with the SEC to state our intention to take the company private,” Lu, chairman of Grindr, confirmed to Forbes Asia. He added that the board was informed prior to the SEC filing.
Zage and Lu are considering the buyout following reports that SeaTown sold shares in the open market after seizing them from a Grindr shareholder. SeaTown has not responded to requests for comment. Lu sold 1 million shares ($13.2 million) to Zage and 300,000 shares on the open market, according to the SEC filing.
financial Performance
The buyout plan coincides with a recent drop in Grindr’s share price (over 20% this month), despite a 25% increase in net profit to $17 million in the second quarter. However, last year Grindr experienced a widened net loss of $131 million due to a non-cash loss related to warrant liability, even with a 33% increase in sales to $345 million. The company has completed the redemption of all public and private warrants.
What Does This Meen for Grindr?
Taking Grindr private could allow Zage and Lu greater operational adaptability and potentially shield the company from short-term market pressures. It also removes the scrutiny of public shareholders. However, it also limits liquidity for investors and could raise questions about long-term strategy.
Who is Affected?
- Grindr Shareholders: They face a potential buyout offer of $15 per share