By Lisa Kerner
Charlotte, N.C., April 30 - United Online, Inc. agreed to acquire FTD Group, Inc. in a stock and cash deal valued at approximately $800 million, or some $15.08 per share.
FTD stockholders will receive $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 for each share of FTD common stock, according to a United Online news release.
United Online said 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 total principal amount of notes.
Under the companies' merger agreement, United Online may increase the per-share cash portion of the price by $2.81 in full substitution of the notes.
FTD stockholders would then receive a total of $10.15 in cash and 0.4087 of a share of United Online stock for each share of FTD common stock for a total value of $14.58 per share, the release stated.
Total consideration to FTD stockholders would then be some $440 million, consisting of $307 million in cash and 12.34 million shares of United Online Stock.
According to United Online, former FTD stockholders will own about 15% of United Online following the transaction's close, slated for the third quarter of 2008.
United Online said it expects to decrease its regular quarterly cash dividend to $0.10 per share, from $0.20 per share, following the transaction's close. FTD, under the terms of the merger agreement, agreed to suspend all dividends on its common stock for 180 days after the date of the signing of the merger agreement.
FTD, a worldwide provider of floral products, will operate as a wholly owned subsidiary of United Online from its existing facilities in Downers Grove, Ill., and the United Kingdom.
Wells Fargo Bank, NA committed to provide a portion of the financing for the transaction, including $375 million of term loans at FTD, funded at closing, and a $75 million revolving credit facility to provide FTD with working capital.
United Online will fund the remaining portion with cash on hand as well as through the issuance of the notes and the United Online stock, the release said.
The acquisition will enable United Online to expand into the domestic and international floral market, with the opportunity to cross-sell FTD products to United Online's existing member base of over 50 million accounts.
"This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the internet," United Online chairman, president and chief executive officer Mark R. Goldston said in the company's news release.
"We will explore opportunities to encourage repeat purchases of FTD products using reward programs based on our MyPoints loyalty marketing service," Goldston added.
FTD shareholders Green Equity Investors IV, LP and FTD Co-Investment, LLC, affiliates of Leonard Green & Partners, LP, agreed to vote in favor of the acquisition. They collectively own 31.7% of FTD's shares.
J.P. Morgan Securities Inc. advised United Online, and FTD was advised by Goldman, Sachs & Co.
United Online is a Woodland Hills, Calif.-based provider of consumer internet and media services. Its services included Classmates, MyPoints, NetZero, Juno and email.
| Acquirer: | United Online, Inc.
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| Target: | FTD Group, Inc.
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| Announcement date: | April 30
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| Transaction total: | $800 million
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| Price per share: | $7.34 in cash, 0.4087 of a United Online share and $3.31 principal amount of United Online 13% senior secured notes due 2013
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| Expected closing: | Third quarter of 2008
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| Stock price for acquirer: | Nasdaq: UNTD: $10.83 on April 29
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| Stock price of target: | NYSE: FTD: $13.50 on April 29
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