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United Online expects to spin off the floral retailer inside a year.
Floral retailer FTD is one step closer to once again becoming a stand-alone company.
United Online Inc., which also owns web sites such as Classmates.com and Internet service providers NetZero and Juno, is hatching plans to spin off FTD into a publicly traded company. United Online acquired FTD in 2008 in a deal valued at $754 million, but now the company wants to more effectively house its businesses under three strategic umbrellas.
Under a plan approved by United Online’s board of directors, FTD would be spun off into a separate entity that includes FTD’s domestic business and Interflora Ltd., a floral retailer in the United Kingdom and Ireland. FTD is No. 78 in the Internet Retailer Top 500 Guide, while Interflora is No. 180 in the Top 400 Europe. Another company would remain as United Online and include the company’s content, media and communications businesses, although it’s a possibility the content and media business could also be spun off, says CEO Mark Goldston.
“It currently is in the best interests of United Online to separate these distinct businesses,” Goldston says. “In light of initiatives in the content, media and communications businesses, including the recent launch of our 4G mobile broadband service, we are concurrently exploring strategic alternatives."
United Online has yet to put a value on deal to spin off FTD, but the company has retained Moelis & Company LLC as its financial advisor to assist and support the company with the FTD transaction and a strategic review of alternatives for the content, media and communications businesses.
United Online expects to finalize spin-off plans for FTD within a year and possibly as soon as the first quarter of 2013, the company says. "The separation is expected not only to unlock value for the benefit of our stockholders, but also to provide significant operational and strategic flexibility for these businesses, better position them to capitalize on their well-recognized brands, and enhance long-term stockholder value,” Goldston says. “This approach also is consistent with input received from various stockholders over the past year, many of which have expressed a view that the market price of our shares does not adequately reflect the inherent value of our businesses."
For the six months ended June 30:
- Revenue for FTD grew year over year 2.6% to $343.9 million from $335.2 million.
- Operating income for FTD increased 9.4% to $29.1 million from $26.6 million in the first six months of 2011.
- Revenue for United Online declined year over year 4.6% to $474.1 million from $497.1 million.
Net income decreased 25.3% to $20.1 million from $26.9 million in the first six months of 2011.