Grindr looks to build a broader LGBTQ-focused platform as it expands beyond dating.

  • Grindr would combine Freddie with its Woodwork healthcare offering under Grindr Health.
  • Grindr expects the expanded healthcare business to generate more than $400 in monthly revenue per active patient.
  • GRND has traded in a narrow range since August.

Grindr Inc. (GRND) shares rose 0.2% in overnight trading ahead of Thursday after the LGBTQ-focused dating platform said it had agreed to acquire HIV-prevention telehealth provider Freddie for $250 million.

The deal marks Grindr’s first major acquisition since its founding in 2009 and expands the company beyond its core dating and advertising business into healthcare and recurring services.

GRND stock declined 4.3% in Wednesday’s regular session, before the deal was announced.

Grindr Expands Beyond Dating

Grindr will acquire PurposeMed, the parent company of Freddie, for $190 million in cash and $60 million in Grindr stock. The deal also includes up to $70 million in additional cash tied to Freddie’s 2027 performance, payable in 2028. The transaction is expected to close in the fourth quarter.

Freddie provides telehealth consultations, HIV testing, prescriptions and medication delivery, and serves patients across all 50 U.S. states. It was launched in 2020.

Grindr plans to combine Freddie with its existing Woodwork healthcare offering under Grindr Health, allowing users to learn about PrEP, review insurance coverage, connect with clinicians, arrange testing, obtain prescriptions and manage refills through the app.

Grindr estimates about 650,000 people in the U.S. currently use PrEP, while roughly 2.2 million could benefit from it. The company expects the combined U.S. telehealth and pharmacy business to generate more than $400 in monthly revenue per active patient.

CEO George Arison told CNBC that the business could eventually become as large as, or larger than, Grindr’s core operation. The company expects the acquisition to be immediately accretive to EBITDA dollars, although investments to scale the U.S. operation will initially pressure margins.

GRND Stock In Narrow Range

Grindr’s second-quarter revenue jumped 33% to $138 million, while the company raised its full-year revenue outlook to about $540 million and adjusted EBITDA guidance to about $232 million.  

Grindr has also been expanding its AI capabilities and preparing its premium Edge product, while CEO George Arison has pushed the company toward becoming a broader platform for LGBTQ users.  

GRND stock has traded in a narrow range since the Aug. 6 report and is up 14% year to date. Morgan Stanley reiterated its ‘Overweight’ rating and $20 price target on Grindr stock early last month.

Currently, all five of the analysts covering the stock recommend ‘Buy’ or higher, per Koyfin data. Their average price target of $20.80 implies a 35% upside from the stock’s closing price on Wednesday.

Retail View On GRND

On Stocktwits, the retail sentiment for GRND dipped to ‘neutral’ from ‘bullish.’ $GRND 49% of people under 30 still live with their parents, leaving them with plenty of extra money to spend on the only ‘dating’ app that actually works for more than 5% of men,” a trader wrote. 

“Probably 25% of these people identify as something inside the LBGTQ group.  Common sense tells me this is safe and undervalued and unique enough that it would diversify any portfolio.”

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