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Grindr’s majority shareholders, billionaires George Raymond Zage III and James Lu, have raised $1 billion in preliminary and conditional debt financing as they explore acquiring the New York-listed company. The deal would value the LGBTQ dating app at $3 billion.
The loan supports taking the company private at a price of at least $15 per share, according to a regulatory filing with the U.S. Securities and Exchange Commission on Oct. 14. While it did not specify which entity would provide the funding, semafor It was previously reported that Zager and Lew had been in talks with New York-based Fortress Investment Group.
Zager said that with financing arranged, the deal could be completed by the end of the year. He said that if the shareholding ratio reaches 90%, the company will be privatized Forbes Asia.
“We filed a 13D with the SEC to indicate our intention to take the company private,” Grindr Chairman Lu added in a message reply. Forbes Asia. He noted that the company’s board of directors was informed of their intentions before filing with the SEC.
Zage and Lu, who together own 64% of the company, are considering a move to take Grindr private following media reports that SeaTown, a subsidiary of Singapore’s government-linked investment company Temasek, which provided a loan to one of Grindr’s shareholders, seized some of the underlying stock and sold it on the open market. No reply from SeaTown Forbes Asia Request to comment. According to the SEC filing, Lu sold 1 million shares worth $13.2 million to Zage and sold 300,000 shares on the open market.
Although the company reported a 25% year-on-year increase in second-quarter net profit to $17 million, Grindr’s stock price fell more than 20% this month amid the announcement of the acquisition plan. Last year, Grindr’s net loss widened to $131 million due to non-cash losses related to warrant liabilities on $345 million in sales, which jumped a third. It completed the redemption of all public and private warrants in early February.
“We believe the company is significantly undervalued,” Lu said. “We’re very excited about a lot of things happening at the company. We’re very confident in the future of the company.”
Commenting on the drop in Grindr’s stock price, Zage said the drop was triggered by market perceptions that the company’s second-quarter earnings fell short of analysts’ expectations. While Grindr doesn’t provide quarterly profit guidance, Zage said, “I don’t see any negative changes in the business outlook.”
Zage successfully oversaw the Asia arm of US hedge fund Farallon Capital Management before setting up Singapore-based Tiga Investments in 2017. Three years later, he founded San Vicente Acquisition with Lu, co-founder of U.S. buyout firm Joffre Capital, and J. Michael Gearon Jr., an American serial entrepreneur, to acquire Grindr for about $608 million, with Zage’s privately held Tiga taking a 54% stake in the venture.
The partners then merged Grindr with Zage’s blank-check company Tiga Acquisition in a deal valued at $2.1 billion and listed on the New York Stock Exchange. The stock soared more than 200% when it went public in November 2022, putting Zager in the three-comma club (taking into account pledged shares). Although the stock price has corrected about 65% since the bubble listing, it earned him a spot on Singapore’s 50 richest people and still accounts for the majority of his US$1.4 billion fortune.
Grindr launched in 2009 as one of the first location-based dating apps for gay men and has since become the world’s most popular LGBTQ mobile app, with more than 14 million monthly active users.
