Let me tell you about a deal where a company paid about five hundred million dollars, and a year later Wall Street said it was worth eleven billion. And then it lost ninety-eight percent.

It starts in 1995 in Columbus, Ohio. A young woman named Angie Hicks is going door to door. Literally. She's selling memberships to a list. A list of plumbers, roofers and electricians that real neighbours say are good. Her first year, she gets about a thousand people to pay.

That list becomes Angie's List. You pay a membership, you read the reviews, you hire the guy. It goes online, it goes national, and in 2011 it goes public on the stock market at thirteen dollars a share.

But there's a problem. It almost never makes money. It loses forty-nine million in 2011. Fifty-three million in 2012. Thirty-three million in 2013. People love the reviews. They just don't love paying for them.

And across the street, there's a rival. HomeAdvisor. And HomeAdvisor does it the other way around. Homeowners use it for free. The contractors pay, every time they get a lead. And HomeAdvisor is owned by a giant called IAC.

So how do these companies actually make money? Today Angi made about a billion dollars last year, and almost none of it comes from homeowners. Homeowners use it for free. The money comes from the contractors, in four ways.

One: leads. A homeowner asks for a roofer, Angi sends the request to a few roofers, and each roofer pays for it. Even if they don't get the job. That's the biggest piece: five hundred and eighty-seven million dollars in 2025. More than half of everything.

Two: advertising. Contractors pay to show up higher on the site. Two hundred and fifteen million. Three: fixed-price jobs. You book "clean my gutters" at a set price, Angi charges you and pays a pro to do it. Seventy-two million. Four: memberships, about twenty-nine million. And another hundred and twenty-six million outside the US.

And this is why contractors complain about Angi. They pay for the lead whether they win the job or not. But look at it from Angi's side. One homeowner asks one question, and three or four contractors each pay for the same answer. That's selling one thing many times. It's a great business, if the homeowners keep coming.

And here's why you should care. This story has a five hundred million dollar price, an eleven billion dollar valuation, a twelve million dollar golden parachute, a choice between eight fifty in cash or a share of stock, and a crash of ninety-eight percent. And by the end, I'll show you the one trick at the centre of it, called multiple arbitrage, and how it works if you buy small home service companies in your town.

Oh, and if we haven't met, my name is Moran Pober. I'm the founder of Acquisitions.com, and I built and sold Rollups.com. I was involved in a roll-up that went from zero to 200 million dollars in revenue in under a year. And now I run Acquisitions.com, which has been involved in more than a billion dollars' worth of transactions. Just check the links below, you'll see. Okay. Back to Angie.

So who is IAC? It's Barry Diller's company. And it's not a private equity fund. It's a public company that builds and buys internet businesses, grows them, and then spins them off. Match, that's Tinder. Expedia. Vimeo. That's their playbook.

October 2015. IAC's CEO, Joey Levin, writes to Angie's List's chairman. Then there's a dinner in Chicago. And IAC puts a number on the table. Eight dollars fifty a share. Cash.

Angie's List says no. So IAC goes public with it. Eight seventy-five a share. About five hundred million dollars. And Angie's List says no again. Too early. Undervalued. Everybody goes home.

And this is where deal flow really comes from. Not a listing. IAC already knew this company inside out, because it was its competitor. The best buyer for a business is very often the guy across the street. And here's the other thing. An activist investor was sitting on Angie's List's board, pushing them to sell. So the pressure was coming from the inside too.

A year later, Angie's List tries to fix itself. It makes the reviews free. Paid members drop from three point three million to about two and a half. And in November 2016 it says the magic words: we're exploring strategic alternatives. That means: we're for sale.

So the bankers go shopping. They call sixty-two possible buyers. Twenty-eight sign an NDA, that's a promise to keep the secrets. And now everybody looks at the numbers. Angie's List: three hundred and twenty-three million in sales. Still losing money. HomeAdvisor: almost five hundred million in sales, growing thirty-eight percent a year.

And here's the number that matters. The bankers looked at what similar companies were worth. A company like Angie's List, slow, shrinking? About eight to ten times its yearly profit. A company like HomeAdvisor, fast and growing? Fifteen to twenty times. Same industry. Same customers. Double the price tag. Remember that. That's the whole video.

Now, due diligence. That's checking everything before you buy. And here's what's interesting. In January 2017, IAC doesn't even bid. They say they haven't seen enough. And the private equity firms? They all walk away. Because the business was in the middle of switching models. You can't borrow a lot of money against a company when you don't know what it's going to earn next year.

And this is a lesson for small deals. If a business is in the middle of changing how it makes money, the bank won't lend against it. So the only buyers left are the ones who already understand it. Usually, again, the competitor.

So IAC comes back. And this time, it doesn't want to pay cash. It wants to pay with stock. Here's the idea. IAC puts HomeAdvisor and Angie's List into one brand-new company. Angie's List shareholders get a slice of that new company. And IAC keeps the rest.

And then they fight over the slice. IAC says ten percent. Angie's List says twenty-two. IAC says no. Eighteen? No. Thirteen? Twelve. Twelve and a half. And they land on thirteen percent. And here's the fun part. IAC keeps eighty-seven percent of the value, but ninety-eight percent of the votes. Because it gets special shares with extra voting power. So IAC is in charge. Forever.

And the big shareholders of Angie's List push back one more time. They want cash, just in case. So IAC says fine. You can take eight dollars fifty in cash instead of the shares. But only up to a hundred and thirty million dollars in total. May 1st, 2017. Deal signed.

And the bankers? Each one got about ten million dollars. The CEO? A golden parachute worth about twelve million, if he lost his job after the deal.

Okay. Now watch what happens. On the day the deal is announced, Angie's List's stock jumps sixty-one percent. And by the day it closes, the shares are worth twelve forty-six. Way more than the eight fifty in cash. So almost nobody takes the cash. Out of a hundred and thirty million available, people take one point nine million.

October 2017, the new company starts trading. It's called ANGI Homeservices. And the stock market says it's worth about six billion dollars. A year later, eleven point six billion.

So let me show you what just happened, because this is the trick. IAC paid about half a billion dollars for a company the market valued at eight to ten times profit. It glued it onto a company the market valued at fifteen to twenty times profit. And now the whole thing gets the higher number. That's multiple arbitrage. You buy at the small multiple, and you get valued at the big one.

And look at IAC. Before the deal, HomeAdvisor made about forty-five million dollars of profit a year. After the deal, IAC's eighty-seven percent was worth about five point three billion dollars. That's more than a hundred times HomeAdvisor's profit. For a business that had been sitting inside IAC the whole time.

And this is exactly how a roll-up works in your town. A small HVAC company or a pest control company sells for maybe three to five times its profit. A group of twenty of them, with one brand, one system, one management team, can be worth ten times or more. Same trucks. Same customers. Different multiple. That gap is where the money is.

But here's the catch. The multiple only stays high if the business keeps growing. So now they have to actually merge two brands, two sales teams, two websites. They buy Handy, an app for cleaners and handymen. In 2021 they rename everything to just Angi.

And it doesn't hold. Sales go from about one point three six billion in 2023 to one point zero three billion in 2025. In 2026, they write off two hundred and twenty-five million dollars of what they paid for past deals. The CEO is replaced. And the company that was worth eleven point six billion? About two hundred and forty million. Down about ninety-eight percent.

And remember the Angie's List shareholders who chose the stock instead of the eight fifty in cash? Today, one of their old shares is worth about sixty cents. The ones who took the cash got eight fifty. That's the other side of multiple arbitrage. The multiple can go up fast. It can also come down fast.

And here's what nobody tells you. The business didn't die. In 2025, Angi still made forty-three point eight million dollars of profit on a billion dollars of sales. It's a real, profitable business. What collapsed was the multiple. Wall Street stopped believing the growth story, so it stopped paying twenty times. Same company, much lower price. So if you do a roll-up, the profit is yours. The multiple is borrowed.

And now Angi is betting on AI. In January 2026 they cut about twelve percent of their staff and said they'd rebuild the company around AI.

And honestly, this is a business AI is perfect for. Think about what Angi actually does. A homeowner says, my deck is rotting. Somebody has to understand the job, give a price range, find three good contractors nearby, and book the visit. That's all language and matching. An AI agent can do that at two in the morning, for every zip code, in every trade. So if I bought a group of home service companies today, that's where I'd start. AI answers every call, gives a price range, books the job. And the humans do what humans do best. Show up at the door.

So let's recap the four lessons. One: your best buyer is usually your competitor. Two: if the business is changing how it makes money, the bank won't lend, so cash buyers disappear. Three: multiple arbitrage is real. Buy small at a low multiple, become big at a high one. Four: the multiple is borrowed. Only the profit is yours. So build the profit first.

So that's the deal. A list that started door to door, a five hundred million dollar price, an eleven billion dollar peak, and a ninety-eight percent fall. If you want to build a roll-up, buy small, merge it right, and keep it growing. And if you want me to break down another deal like this, tell me which one in the comments.

And Angie? She's still on the board.