FTD launches pro rata at Libor plus 350 bps, term B at Libor plus 400 bps to 450 bps

By Sara Rosenberg

New York, June 11 - FTD Group Inc. launched its revolver and term loan A on Wednesday with price talk of Libor plus 350 basis points and its term loan B with talk of Libor plus 400 bps to 450 bps, according to a market source.

Pricing on the $200 million six-year term loan B will depend on credit ratings, which are expected to be received from the agencies next week, the source said.

Other guidance announced on the term loan B that are also rating dependant include a 3% Libor floor and an original issue discount in the 98 to 99 range, the source continued.

Upfront fees on the $75 million five-year revolver and the $175 million five-year term loan A are 50 bps for commitments of less than $25 million, 75 bps for commitments in the $25 million to $35 million range and 100 bps for commitments of more than $35 million, the source added.

Commitments are due on June 24.

Wells Fargo is the lead arranger, bookrunner and administrative agent on the $450 million deal.

Financial covenants include a leverage ratio, a fixed-charge coverage ratio and a maximum capital expenditures requirement.

Proceeds will be used to help fund United Online Inc.'s acquisition of FTD for $7.34 in cash, 0.4087 of a share of United Online common stock and $3.31 principal amount of United Online 13% senior secured notes due 2013 per share.

The total consideration to FTD stockholders will be about $456 million, consisting of $222 million in cash, 12.35 million shares of United Online stock and $100 million aggregate principal amount of notes.

The remaining purchase price consists of repayment of FTD debt and expenses incurred in connection with the transaction.

If United Online raises an additional $100 million in debt financing, it may replace the senior notes with additional cash consideration, in which case FTD stockholders will receive a total of $10.15 in cash and 0.4087 of a share of United Online stock per share.

In such case, the total consideration to FTD stockholders will be about $440 million, consisting of $307 million in cash and 12.34 million shares of United Online stock.

The $100 million in additional debt financing could come in the form of senior secured debt, mezzanine financing, as well as in various other forms.

Total and senior leverage at close will be 3.6 times.

Upon closing of the transaction, the former FTD stockholders will own about 15% of United Online.

The acquisition is anticipated to be completed during the third quarter, subject to approval of FTD stockholders, a financing condition and customary closing conditions.

After the closing of the transaction, FTD will continue to operate as a wholly owned subsidiary of United Online from FTD's existing facilities, including its U.S. headquarters in Downers Grove, Ill., and its international headquarters in the United Kingdom.

FTD is a provider of floral related products and services. United Online is a Woodland Hills, Calif., provider of consumer internet and media services.

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