United Online to purchase FTD Group

United said it will fund the transaction with available cash, notes and stock as well as term loans and a revolving credit agreement.

The acquisition will provide additional revenue and help United expand into the growing floral Internet business, the company said.

FTD shareholders will receive $7.34 in cash, 0.4087 of a share of United stock and $3.31 of United's senior secured notes due 2013 for each share they own. The terms give FTD stockholders $15.08 per share based on United's closing price of $10.83 on Tuesday.

The companies put the amount given to FTD stockholders at about $456 million, which contains $222 million in cash, 12.35 million shares of United stock and $100 million notes.

United and FTD valued the total deal at approximately $800 million, which includes FTD debt and expenses.

United said it has the option to not include the notes in the deal, instead raising the per-share amount by $2.81.

The acquisition is expected to close during the third quarter, which is subject to a financing condition and other conditions.

When the deal closes former FTD shareholders will own about 15 percent of United Online, which provides consumer Internet and media services. FTD Group will continue to run as a United subsidiary.

United also said it plans to cut its regularly quarterly dividend by 10 cents to 10 cents after the deal is complete.