United Online diversifies revenue stream with acquisition of FTD Group

By Lisa Kerner

Charlotte, N.C., Aug. 26 - United Online, Inc. successfully completed its $754 million acquisition of FTD Group, Inc., it was announced on Tuesday.

FTD shareholders will receive $10.15 in cash and 0.4087 of a share of United Online common stock for each share of FTD common stock, for a total value of $14.62 per share based on United Online's closing stock price of $10.93 on Tuesday.

The total consideration to FTD stockholders will be about $441 million, consisting of approximately $307 million in cash and approximately 12.3 million shares of United Online common stock, according to a United Online news release.

Shares of FTD common stock were slated to cease trading on the New York Stock Exchange effective at the close of trading on Tuesday. Shares of United Online common stock will continue to trade on the Nasdaq Global Select Market under the ticker symbol "UNTD."

It was reported that United Online financed the acquisition in part with the proceeds of its previously announced $60 million credit facility with Silicon Valley Bank and with term loan borrowings under the previously announced $425 million credit facility - which includes a $50 million revolving credit facility that was undrawn at the closing of the transaction - that a subsidiary of United Online entered into with Wells Fargo Bank, NA.

United Online expects to have between $45 million and $55 million in cash on its balance sheet after payment of its regular quarterly dividend on Friday.

The acquisition provides United Online with a significant increase in scale, United Online chairman, president and chief executive officer Mark R. Goldston said.

"FTD's world-class brands, customer demographics and significant internet presence are a great fit with our existing consumer brands," Goldston said in the release.

The two companies generated revenues of $1.14 billion and operating income of $169.1 million for the 12 months ended June 30, according to United Online.

FTD is a worldwide provider of floral products with facilities in Downers Grove, Ill., and the United Kingdom.

United Online is a Woodland Hills, Calif.-based provider of consumer internet and media services. Its services include Classmates, MyPoints, NetZero and Juno e-mail.

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