United Online To Acquire Floral Company FTD For $800 Million
This story was written by Joseph Weisenthal.
A dialup-access business, a social network why not add a flower business? United Online (NSDQ: UNTD), the ISP and parent of Classmates.com has announced the acquisition of FTD, the floral products company, for $800 million. FTD shareholders will receive a combination of cash, stock, and United Online debt worth $15.08 per share, representing an 11 percent premium to yesterday's closing price for the company.
So what's the idea here? The announcement touts a more diversified revenue stream for UNTDthat's certainly true. It also sees an opportunity to market flowers to UNTD's customer base, which it claims has similar demographic characteristics to FTD's customers (that one is a bit strange). Altogether, it expects improved scale and that it will be accretive to earnings in 2009. Surprisingly, UNTD is up strongly pre-market; usually you could expect the market to hate this kind of deal. If there is analogy somewhere, consider Liberty Media, which has combined communications, media and various transactional business. Even still, this is a surprising buy. Basically, the company is making a big move to dilute the impact of its declining ISP business. Release.
By Joseph Weisenthal