CEO Roland Smith will retire and Troy Rice will oversee e-commerce as Office Depot’s new chief operating officer.
United Online, whose holdings include Internet service providers Juno and NetZero, will pay $806 million in stock, cash and assumption of debt. The two companies share a similar customer base and expect to cross-sell their services, United Online says.
FTD Group Inc., the second-largest online florist, is being acquired by diversified Internet company United Online Inc., the companies announced today.
The deal will provide cross-selling opportunities because of the overlap in customers between the two companies and provide new revenue streams for United Online, says Mark R. Goldston, chairman, president and CEO. United Online owns Internet service providers Juno and NetZero, the Classmates online social network and web-based loyalty point program MyPoints.
"This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the Internet," Goldston says. "Our proven expertise in implementing marketing initiatives to drive results should enable us to leverage the FTD brand and bring FTD products to United Online`s over 50 million consumer accounts. Further, we will explore opportunities to encourage repeat purchases of FTD products using reward programs based on our MyPoints loyalty marketing service.”
United Online will pay FTD shareholders $456 million in cash and stock. It will also assume FTD debt, bringing the total value of the deal up to about $806 million.
FTD, No. 50 in the Internet Retailer Top 500 Guide, is the second-leading online florist after 1-800-Flowers.com Inc., with $260 million in online sales in 2007.
Both FTD and United Online reported today preliminary results for the quarter that ended March 31. FTD said it expects $192 million in revenue and $9 million in net income for the quarter, compared with $182.9 million in revenue and $9.6 million in net income in the same quarter a year ago. United Online projects revenue in the range of $121.0 and $121.8 million and operating income of between $19.9 million and $20.5 million. In the same quarter a year ago, the company reported revenue of $129.9 million and income of $22.1 million.
The deal is expected to close in the third quarter.