United Online Inc. is splitting into two publicly traded companies - one for its Internet connection and social media businesses and the other for its FTD floral products and services business.
The Woodland Hills-based company said dividing itself provides operational and strategic flexibility for the business divisions and better positions them to capitalize on their well-recognized brands, CEO Mark Goldston said.
“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,” Goldston said in a prepared statement.
United Online acquired the FTD Group Inc. for $800 million in 2008. That business has been the largest revenue generator for the company.
In the second quarter ending June 30, the FTD division brought in $167.5 million in revenue compared to the $38 million from its Memory Lane and Classmates.com social media sites and related sites, and the $26.8 million from its Internet connection services.
The company is preparing a detailed plan on the split for approval by its board of directors. It is also considering “strategic alternatives” for the social media and Internet connection businesses, including an additional spin off, the company said in a release.
United Online had planned to spin off Classmates.com once before in 2007, even going as far as stating an initial public offering of shares would bring in $117 million. In December 2007, however, the company backed off from those plans because it would not be in the best interest of the shareholders.
Mark R. Madler