United Online Inc, an internet service provider and parent of Classmates.com , announced plans on Wednesday to acquire FTD Group Inc, a provider of floral services and products, for about $800 million.
FTD shareholders will receive a combination of cash, stock, and United Online debt worth $15.08 per share, representing a 12 percent premium to yesterday's closing price for the company.
The offer is made up of $7.34 a share in cash, 0.4087 share of United Online and $3.31 worth of 13 percent senior secured notes. United Online said it also has the option to replace the notes from the bid with additional cash.
This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the Internet, said United Online Chief Executive Mark R. Goldston.
The total amount to be given to FTD stockholders are about $456 million, which contain $222 million in cash, 12.35 million shares of United stock and $100 million notes.
The acquisition is expected to be sealed during the third quarter, which is subject to a financing condition among other conditions.
Shares of FTD Group were down 0.07 percent to $13.49 on the New York Stock Exchange, while United Online fell 80 cents or 7.4 percent to $10.03.
Meanwhile, United Online Inc. also said preliminary first-quarter revenue beat its expectations. The company now expects revenue of $121 million to $121.8 million, from previous guidance of $116 million to $120 million.
Analysts expect revenue of $118.8 million. The company expects earnings between 18 and 19 cents per share, or between 30 and 31 cents excluding one-time items.