- Diversifies and Expands Floral and Gift
Offerings, Broadens Consumer Reach and Enhances Shopping
Experience
- Expected to be Accretive to FTD's 2015 Cash
Earnings Per Share Excluding Transaction-Related and Integration
Costs
- More Than $25 Million of Annualized Cost
Synergies Expected
FTD Companies, Inc. ("FTD") (Nasdaq:FTD) and Liberty Interactive
Corporation ("Liberty") (Nasdaq:LINTA) (Nasdaq:LINTB)
(Nasdaq:LVNTA) (Nasdaq:LVNTB) today announced that they have
executed a definitive agreement under which FTD will acquire
Liberty's Provide Commerce floral and gifting businesses. Under the
terms of the $430 million transaction, Liberty will receive 10.2
million shares of FTD common stock representing 35% of the combined
company and $121 million in cash. FTD and Liberty expect to
complete the transaction by the end of 2014.
The strategic combination of FTD's brand and floral network with
the Provide Commerce collection of established and highly
recognizable consumer gifting e-commerce brands, which include
ProFlowers, Shari's Berries and Personal Creations, will further
FTD's vision to become the world's leading and most trusted floral
and gifting company. The transaction will unite two highly
complementary businesses, generate material cost synergies and
create a team with "best-in-class" operating strategies. Together,
FTD and Provide Commerce, each with over $600 million in annual
revenues, will offer consumers innovative and expansive floral and
gift products and an enhanced shopping experience. The combined
company will also allow FTD to provide greater support for the
overall floral industry by expanding resources to create new
programs and services to support member florists in their local
businesses.
"This transaction provides the opportunity to create significant
value for our stockholders and offers immediate benefits for
consumers and our premier network of member florists. The
combination of these businesses will expand the breadth of our
brands, provide opportunities to further diversify our revenue
streams and open up additional avenues for growth and innovation,"
said Robert S. Apatoff, President and Chief Executive Officer of
FTD. "We expect the combination with Provide Commerce's highly
recognizable and successful portfolio of brands to enhance our
already robust consumer product offerings. In addition, we expect
the transaction will provide us with greater resources to further
develop new product and service categories and broaden our consumer
demographic through complementary customer bases. We are excited
about the opportunities this combination will create for consumers,
member florists and our stockholders."
"We are excited to become the largest shareholder in the
complementary businesses of Provide Commerce and FTD," said Gregory
B. Maffei, President and CEO of Liberty. "FTD has an extensive
florist network while Provide Commerce has a proven ability to
source their flowers directly from top growers. The combined
company will be able to offer comprehensive and unique gifting
services in the U.S. and around the world."
"FTD and Provide Commerce share a common mission and vision,"
said Chris Shimojima, CEO of Provide Commerce. "Together we will
create outstanding and delighting gifting experiences for our
customers for all of life's most important moments."
Summary of Strategic and Financial Benefits
The transaction is expected to create one of the most
diversified, established and trusted floral and gifting companies
in the world. FTD believes the combination will provide the
following strategic and financial benefits:
- Deepens Consumer Gifting Category: The
combination of Provide Commerce's collection of respected and
highly recognizable e-commerce brands, including ProFlowers,
Shari's Berries and Personal Creations, with FTD's iconic brands,
FTD and Interflora, and Mercury Man logo is expected to enhance
FTD's already robust consumer floral and gifting category.
- Strengthens Floral Network: The expected
efficiencies and greater resources of this combination will enable
FTD to further invest in new products, services and technology that
are expected to directly benefit its vast network of florists and
the floral industry as a whole.
- Enhances Consumer Shopping Experience: FTD
will immediately be able to offer a wider selection of floral and
gifting products, providing consumers with greater convenience and
choice.
- Provides Significant Cost Synergies: The
combination is expected to generate more than $25 million in annual
synergies within 36 months of closing, with a goal of creating
incremental value for FTD stockholders over time.
- Adds Significant Committed Stockholder:
Liberty will own approximately 35 percent of FTD at closing,
reflecting Liberty's commitment and belief in FTD.
- Increases Market Capitalization: The
transaction will increase FTD's market capitalization and shares
outstanding, which is expected to enhance the ability to access the
capital markets in the future.
Transaction Details
Under the terms of the transaction agreement Provide Commerce
will become a wholly-owned subsidiary of FTD. The transaction is
valued at $430 million, comprising 10.2 million shares of FTD
common stock, valued at $309 million, based on the volume weighted
average price of FTD's shares for the 10 day period ended July 28,
2014, and $121 million in cash. Upon closing, FTD will have
approximately 29.2 million shares outstanding (based on FTD shares
outstanding as of July 29, 2014) and Liberty will own approximately
35 percent of FTD shares outstanding.
Under the terms of the transaction agreement, Provide Commerce's
RedEnvelope business will be excluded from the transaction and
retained by Liberty.
The transaction is expected to close by the end of 2014, subject
to customary closing conditions including approval by regulators
and FTD's stockholders. FTD has secured financing commitments from
Bank of America Merrill Lynch and Wells Fargo Bank, N.A. for this
transaction.
Governance and Management
Upon closing of the transaction, FTD's management team will
remain in place with Robert S. Apatoff continuing as President and
CEO. Robert Berglass will continue as Chairman of the Board of FTD.
FTD will expand its Board of Directors from seven to 11 directors
with Liberty selecting four new directors for appointment to the
Board.
While the transaction is being completed, FTD and Provide
Commerce expect no change in their independent, existing
operations, including customer service and product availability.
Upon closing of the transaction, there will be no immediate changes
to the operations of Provide Commerce's e-commerce brands.
Advisors
Moelis & Company is serving as financial advisor to FTD and
Jones Day is acting as legal counsel. Baker Botts L.L.P. and Cooley
LLP are acting as legal counsel for Liberty and Provide Commerce,
respectively.
Conference Call and Webcast
FTD will host a conference call and webcast at 9:00 a.m. ET
today to discuss the strategic acquisition of Provide Commerce. The
webcast and presentation slides will be available live and archived
on the investor relations section of the Company's website at
http://www.ftdcompanies.com. In addition, participants in North
America may dial 877-407-4018 and International participants may
dial 201-689-8471 to listen to the live broadcast.
About FTD
FTD Companies, Inc. is a premier floral and gifting company. FTD
provides floral, gift and related products and services to
consumers, retail florists, and other retail locations primarily in
the U.S., Canada, the U.K., and the Republic of Ireland. The
business uses the highly-recognized FTD® and Interflora® brands,
both supported by the iconic Mercury Man logo that is displayed in
nearly 40,000 floral shops in 150 countries. FTD's portfolio of
brands also includes Flying Flowers, Flowers Direct, and Drake
Algar in the U.K.
About Liberty Interactive Corporation
Liberty Interactive Corporation operates and owns interests in a
broad range of digital commerce businesses. Those interests are
currently attributed to two tracking stock groups: the Liberty
Interactive Group and the Liberty Ventures Group.
The Liberty Interactive Group (Nasdaq:LINTA)
(Nasdaq:LINTB) is primarily focused on digital commerce and
consists of Liberty Interactive Corporation's subsidiaries QVC,
Provide Commerce, Backcountry.com, Bodybuilding.com,
BuySeasons, and CommerceHub and its interest in HSN. The businesses
and assets attributed to the Liberty Ventures
Group (Nasdaq:LVNTA) (Nasdaq:LVNTB) consist of all of Liberty
Interactive Corporation's businesses and assets other than those
attributed to the Liberty Interactive Group and include
its subsidiary TripAdvisor, its interest in Expedia, and minority
interests in Time Warner and Time Warner Cable.
Cautionary Information Regarding Forward-Looking
Statements
This release contains certain forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, as amended, based on our
current expectations, estimates and projections about our
operations, industry, financial condition, performance, results of
operations, and liquidity. Statements containing words such as
"may," "believe," "anticipate," "expect," "intend," "plan,"
"project," "projections," "business outlook," "estimate," or
similar expressions constitute forward-looking
statements. These forward-looking statements include, but are
not limited to, statements regarding potential acquisitions,
including the planned acquisition of Provide Commerce; statements
regarding expected synergies and benefits of the planned
acquisition of Provide Commerce; expectations about future business
plans, prospective performance and opportunities; statements
regarding regulatory approvals; statements regarding the expected
timing of the completion of the planned acquisition of Provide
Commerce; and statements about our strategies. Potential
factors that could affect these forward-looking statements include,
among others, the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transaction agreements; the risk that the necessary stockholder
approval may not be obtained; the risk that the necessary
regulatory approvals may not be obtained or may be obtained subject
to conditions that are not anticipated; the risk that the proposed
transaction will not be consummated in a timely manner; risks that
any of the closing conditions to the proposed transaction may not
be satisfied or may not be satisfied in a timely manner; risks
related to disruption of management time from ongoing business
operations due to the proposed transaction; failure to realize the
benefits expected from the proposed transaction; failure to
promptly and effectively integrate the acquisition; and the effect
of the announcement of the proposed transaction on the ability of
FTD and Provide Commerce to retain customers and retain and hire
key personnel, maintain relationships with suppliers, and on their
operating results and businesses generally, as well as the factors
disclosed in the Company's filings with the Securities and Exchange
Commission, including without limitation, information under the
captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk
Factors." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's
analysis only as of the date hereof. Any such forward-looking
statements are not guarantees of future performance or results and
involve risks and uncertainties that may cause actual performance
and results to differ materially from those predicted. Except
as required by law, we undertake no obligation to publicly release
the results of any revision or update to these forward-looking
statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
Definitions
Cash Earnings per Share. FTD defines cash
earnings per share as net income adjusted to exclude the after-tax
impact of stock-based compensation, amortization,
transaction-related and integration costs, litigation and dispute
settlement charges or gains, restructuring and other exit costs,
and loss on extinguishment of debt divided by shares
outstanding.
Litigation and dispute settlement charges or
gains include estimated losses for which FTD has
established a reserve, as well as actual settlements, judgments,
fines, penalties, assessments or other resolutions against, or in
favor of, FTD related to litigation, arbitration, investigations,
disputes or similar matters. Insurance recoveries received by FTD
related to such matters are also included in these adjustments.
Transaction-related and integration costs are
certain expense items resulting from actual or potential
transactions such as business combinations, mergers, acquisitions,
dispositions, spin-offs, financing transactions, and other
strategic transactions, including, without limitation, (i)
compensation expenses and (ii) expenses for advisors and
representatives such as investment bankers, consultants, attorneys,
and accounting firms. Transaction-related and integration costs may
also include, without limitation, transition and integration costs
such as retention bonuses and acquisition-related milestone
payments to acquired employees.
Additional Information
FTD will solicit the required approval of its stockholders by
means of a proxy statement, which will be mailed to stockholders
upon completion of the required Securities and Exchange Commission
(SEC) filing and review process. The proxy statement will contain
information about FTD, Provide Commerce, the proposed transaction
and related matters. FTD stockholders are urged to read the proxy
statement carefully when it is available, as it will contain
important information that stockholders should consider before
making a decision about the transaction. In addition to receiving
the proxy statement from FTD in the mail, stockholders will also be
able to obtain the proxy statement, as well as other filings
containing information about FTD, without charge, at the SEC's web
site, www.sec.gov, or from FTD at its website,
www.ftdcompanies.com, or FTD Companies, Inc., 3113 Woodcreek Drive,
Downers Grove, IL 60515, Attention: Corporate Secretary.
Participants in Solicitation
FTD and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from FTD's stockholders
with respect to the proposed transaction. Information regarding any
interests that FTD's executive officers and directors may have in
the transaction will be set forth in the proxy statement.
CONTACTS: Contacts for FTD
Investor Relations:
Jandy Tomy
630-724-6984
ir@ftdi.com
Media Inquiries:
Phil Denning
203-682-8246
phil.denning@icrinc.com
Contacts for Liberty Interactive Corporation
Investor Relations:
Courtnee Ulrich
720-875-5420
courtnee@libertymedia.com
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