Pacific Avenue Capital Partners Acquires Care.com for $320 Million as IAC Streamlines Portfolio

2026-03-03 companies

Los Angeles, Tuesday, 3 March 2026.
Pacific Avenue Capital Partners will acquire Care.com from IAC for $320 million in a strategic carve-out. The deal marks a notable pivot for IAC, divesting the asset for significantly less than its $500 million purchase price in 2020.

Deal Mechanics and Valuation Gap

On March 2, 2026, IAC Inc. (NASDAQ: IAC) formally announced the sale of its subsidiary Care.com to an affiliate of Pacific Avenue Capital Partners in an all-cash transaction valued at approximately $320 million [1][8]. This divestiture represents a significant valuation compression for the digital holding company, which originally acquired the family care platform for nearly $500 million in 2020 [3][7]. The sale price reflects a nominal decrease of -36% from IAC’s initial entry point, highlighting the challenges the conglomerate has faced in maximizing the asset’s value over its six-year hold period. The transaction is slated to close in the first half of 2026, subject to customary closing conditions, though it cannot be consummated prior to March 13, 2026 [8].

Strategic Realignment for IAC

For IAC, this disposal is part of a broader strategy to simplify its complex portfolio and refocus capital on its core holdings. Christopher Halpin, IAC’s CFO and COO, emphasized that the move allows the company to sharpen its strategic focus on assets like People Inc. and its stake in MGM Resorts, while opportunistically monetizing non-core holdings to enhance financial flexibility [8]. The sale comes on the heels of a mixed financial performance for IAC; in its fourth-quarter 2025 earnings report released in February, the company posted revenue of $646 million—beating estimates of $641 million—but reported a wider-than-expected loss per share of -$0.99 against projections of $0.68 [2][6]. The capital generated from the Care.com sale is expected to bolster IAC’s balance sheet as it navigates these mixed results.

Pacific Avenue’s Operational Play

Pacific Avenue Capital Partners, a Los Angeles-based private equity firm with approximately $3.8 billion in assets under management as of September 2025, views this acquisition as a prime opportunity for its operational playbook [1]. Specializing in corporate carve-outs, the firm plans to treat Care.com as a standalone entity, marking the first investment for its Pacific Avenue Fund II [1][5]. Chris Sznewajs, Founder and Managing Partner of Pacific Avenue, described Care.com as an industry leader with a clear path for growth as an independent company [1]. The firm intends to implement specific stabilization measures within the first 100 days, focusing on pricing optimization and cost reductions to drive efficiency [7].

Market Position and Future Outlook

Care.com remains a dominant player in the $400 billion family care market, having served over 45 million people and partnering with more than 700 employers since its inception in 2007 [1][5]. Despite the valuation drop upon exit, Care.com leadership asserts the business is on solid footing. CFO Michelle Arbov noted that the company enters this new chapter with a “profitable foundation,” positioning it to scale efficiently under new ownership [1]. Brad Wilson, CEO of Care.com, echoed this sentiment, stating the transition allows the platform to deepen support for families and caregivers while expanding enterprise partnerships [2]. With the transaction moving toward finalization, Pacific Avenue will look to leverage these fundamentals to reverse the asset’s trajectory and capture value where IAC struggled.

Sources

Mergers Acquisitions Private Equity