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Gay dating app Grindr to go public as part of $2.1 billion SPAC deal

By Echo Wang

(Reuters) – Gay dating app Grindr said on Monday it would go public through a merger with a blank check acquisition company – a deal that values ​​it at $2.1 billion and features Tiga Investments CEO Raymond Zage on both sides of the deal.

Grindr said its existing shareholders would own 78% of the company after the merger, which comes two years after China’s Kunlun Tech Co sold it for $620 million over US national security concerns.

Although Grindr did not disclose the identity of its existing shareholders, Reuters previously reported that Zage held a 41% stake in the consortium that acquired Grindr. A source familiar with the matter said Monday that Zage continues to be an investor in Grindr.

Tiga Acquisition Corp, the Singapore-based special purpose acquisition company (SPAC) that will merge with Grindr, is controlled by Zage.

As part of the deal, Grindr will receive $284 million in cash from Tiga and up to $100 million under a forward purchase agreement.

Grindr and Tiga expect their deal to require clearance from the Committee on Foreign Investments in the United States (CFIUS), which reviews deals for potential national security risks, according to a copy of their merger agreement that was released. was made public on Monday.

CFIUS ordered Kunlun to sell Grindr in 2019 over concerns that US users’ personal data could be accessed or exploited by the Chinese government.

It was unclear whether CFIUS played a role in Grindr’s decision to explore a sale and merger with a SPAC. A spokesperson for the US Treasury Department, which chairs CFIUS, did not respond to a request for comment.

Reuters reported last year that Kunlun and Grindr gave CFIUS information about the transaction that contradicted information provided to potential investors and Chinese regulators.

They told CFIUS that James Lu, a former Baidu Inc executive who was part of the consortium that bought Grindr and is now Grindr’s chairman, had no prior business relationship with a key Kunlun adviser, although the disclosures to investors and Chinese regulatory documents indicated otherwise. .

Grindr chief executive Jeff Bonforte and Grindr chief operating officer Rick Marini will step down and a search for Bonforte’s replacement is underway, a person familiar with the matter said Monday.

Bonforte and Marini were part of investment firm Catapult Capital which competed against Lu and Zage to buy Grindr before striking a deal to work together.

Atlanta Hawks co-owner Michael Gearon, another major shareholder who was part of the consortium that acquired Grindr two years ago, will continue to be invested in the company, the source said.

Grindr said in a presentation to investors on Monday that it has 11 million monthly active users and revenue has grown 30% over the past year.

The deal values ​​Grindr at 27 times its 2021 adjusted earnings before interest, taxes, depreciation and amortization of $77 million. By comparison, shares of dating app peers Match Group Inc and Bumble Inc are trading at 22 times and 25 times their 2021 EBITDA, respectively, according to Refinitiv.

(Reporting by Echo Wang in New York; Editing by Greg Roumeliotis and Edwina Gibbs)