Leonard Green Selling FTD

United Online Inc. has agreed to buy floral delivery company FTD for approximately $800 million in cash and stock. Sellers include Leonard Green & Partners, which sponsored a $422 million take-private buyout of FTD in February 2004.

 

PRESS RELEASE

 

United Online, Inc. (UNTD), a leading provider of consumer Internet and media services, and FTD Group, Inc. (FTD), a leading provider of floral and related products and services to consumers and retail florists in the United States, Canada, the United Kingdom and the Republic of Ireland, announced today that they have entered into a definitive merger agreement providing for the acquisition of FTD Group, Inc. by United Online, Inc.

 

Transaction Terms

 

Under the terms of the merger agreement, FTD stockholders will receive $7.34 in cash, 0.4087 of a share of United Online common stock (“United Online Stock”) and $3.31 principal amount of United Online 13% senior secured notes due 2013 (the “Notes”) for each share of FTD common stock in the merger, for a total value of $15.08 per share of FTD common stock based on United Online's closing stock price of $10.83 on April 29, 2008. The total consideration to FTD stockholders will be approximately $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 indebtedness and expenses incurred in connection with the transaction. Upon closing of the transaction, the former FTD stockholders will own approximately 15% of United Online.

 

Under the terms of the merger agreement, United Online may elect to increase the per share cash consideration payable to FTD's stockholders by $2.81 in full substitution of the Notes, in which case FTD stockholders will receive a total of $10.15 in cash and 0.4087 of a share of United Online Stock in exchange for each share of FTD common stock in the merger, or a total value of $14.58 per share of FTD common stock, based on United Online's closing stock price of $10.83 on April 29, 2008. In such case, the total consideration to FTD stockholders will be approximately $440 million, consisting of $307 million in cash and 12.34 million shares of United Online Stock. FTD will notify its stockholders as to the amount of cash, United Online Stock and, if applicable, Notes consideration they will receive for each share of FTD common stock in the merger in the definitive proxy/prospectus materials to be mailed to FTD's stockholders.

 

Acquisition Benefits

 

United Online anticipates that the FTD acquisition will include the following key strategic benefits:

 

Significant Increase in Scale, resulting in pro forma combined company revenues of $1,145 million and pro forma combined company operating income of $175 million for the 12 months ended December 31, 2007. The pro forma combined company's stock based compensation, depreciation and amortization for such period would have been $68 million.

Diversification of Revenue Streams, resulting in United Online's Communications segment revenues, which are principally driven by its NetZero and Juno Internet access services, representing less than 25% of total United Online revenues. The addition of FTD to the United Online family will provide additional revenue streams