Here’s a way to get out of the evaporating dial-up ISP business: United Online (UNTD), owner of low-cost ISPs NetZero and Juno, is acquiring mega-florist FTD Group (FTD) for $800 million in cash and stock.
The total purchase price amounts to $15.08 a share for FTD, an 11% premium on Tuesday’s closing price. FTD shareholders will end up owning 15% of United. The acquisition will reduce United’s online access business to less than 25% of total revenue. United also owns social network Classmates.com.
We don’t know what the folks at United know about the flower business, but CEO Mark Goldston has a background in retail (apparel, cosmetics) and says he’ll be able to market FTD products to United’s user base of 50 million accounts.
Separately, United released preliminary Q1 results, and raised revenue and operating income guidance:
Revenue: $121 million – $121.8 million
Operating income: $19 million – $20.5 million
Revenue: $116 million – $120 million
Operating income: $11.8 million – $15.8 million
Upon closing of the deal, United is decreasing its regular cash dividend from $0.20 to $0.10.
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