Announcement Ftd Acquires Proflowers (and Other Provide Commerce Brands)

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From the official release:

DOWNERS GROVE, Ill. and ENGLEWOOD, Colo., July 30, 2014 (GLOBE NEWSWIRE) -- FTD Companies, Inc. ("FTD") FTD +8.33% and Liberty Interactive Corporation ("Liberty")LINTA -0.01%LINTB +1.70%LVNTA -0.01%LVNTB +2.48% 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.

http://www.marketwatch.com/story/ft...h-annual-revenue-of-over-1-billion-2014-07-30


Letter from FTD to members:

July 30, 2014

To Our Valued Florists,

We are pleased to announce that FTD has entered into an agreement to acquire Provide Commerce, enhancing our position as one of the leading and most trusted floral and gifting companies in the world. First and foremost, I want to assure you that we remain fully committed to our member florists, who will remain the backbone of FTD.

The floral and gift industry continues to evolve - more than ever, the consumer is in control of where and how they shop. Quality offerings are more prominently positioned in grocery and mass market stores. In most every consumer category, consumers are migrating to e-commerce and mobile platforms. In the face of this changing landscape, it is our responsibility to attract as much consumer demand as possible to FTD, and subsequently, our member florists.

Provide Commerce operates under several popular brands in the online floral and gifting category, including ProFlowers. ProFlowers offers floral arrangements that are direct shipped to consumers, as well as same day floral delivery. In addition to floral products, Provide also sells and markets several leading non-floral gifting brands, including Shari's Berries and Personal Creations.

We believe this transaction will be value creating for FTD, our member florists and the floral industry as a whole. Together, we can assure you, our marketing will be supportive of the floral industry and our member florists, we will attract a wider complement of consumers into our floral and gifting business, and we will have greater resources to dedicate towards the success of our member florists.

Following the completion of this acquisition, we will take the following steps to directly benefit our member florists:

  • Following closing of this transaction, we expect to generate significant additional florist filled order volume for the FTD network. FTD member florists will have opportunities to receive increased order volume and additional customers to market to locally.

  • This acquisition will enhance our ability to invest in national brand advertising, which will showcase our member florists and FTD products. In addition, we plan to reintroduce our member florist local marketing program, formerly known as "FTD AdPlus," designed to help you drive business in your local area.

  • We will continue to invest in our "best in class" Mercury Point of Sale and enhance member web sites, which will further drive traffic and local order volume. Both represent critical products for FTD florist members to more effectively manage and grow their businesses.

  • The acquisition will further enhance our roster of respected and established brands in the consumer gifting category, including the addition of Shari’s Berries and Personal Creations. As a consequence, FTD member florists will have access to these products through our wholesale catalogue and web gift program.

  • This acquisition will also strengthen our procurement and logistics capabilities, enabling us to provide our member florists with access to lower cost goods (both flower and container), thereby improving efficiency and order profitability.
I want to assure you that our support and dedication to you, our local member florists, will remain unchanged. You are, and will remain, the heart and soul of FTD, and we will continue to focus on supporting you over the long-term, providing you with services that are designed to elevate your store's reputation and promote revenue growth.

Our members will continue to have access to our iconic Mercury Man logo, an internationally recognized symbol of excellence displayed in nearly 40,000 dedicated florist shops in 150 countries around the world. Our mission is to inspire and delight our customers when expressing life's most important sentiments and this acquisition will serve us well in this pursuit.

This acquisition is not expected to close until later this year - we will provide you with additional updates as we progress further. I have the utmost confidence that the integration process will be smooth and streamlined, with minimal to no interruption for member florists.

We sincerely thank you, again, for your continued support of FTD. We look forward to embarking on this exciting new chapter of FTD's storied history alongside our member florists.

Best regards,
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Rob ApatoffPresident & Chief Executive Officer
FTD Companies, Inc.



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.
 
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I just found this in my email (from another florist forum ~ not from FTD, I'm not a member.....).

My first thought was "yay!" My second thought was "gee, I hope they don't also acquire the underhanded marketing techniques ProFlowers has engaged in." My third thought was, "oh, wait a minute....they already know how to do that."

I do, however, think that all in all this is a good thing. It should drive prices down for flower products for members if they choose to buy from FTD. It will also knock out a major name in the competition department for holidays. I'm sure FTD will market heavily that they have acquired ProFlowers during the holidays but they will still be using the name FTD and that is already a largely known brand name so this might actually be good for non-member florists as well.

I guess time will tell, but that's just my gut reaction.
 
FREE SHIPPING ! Two magic words online consumers are buying these days. Each of the big DOGS recognized the potential of FREE SHIPPING (straight from the farms, eh?)
It is one of the biggest scams that is "legally feasible". Small disclaimer informs the buyer that flowers arrive shipped in the box. Recipient of the flowers usually keeps the mind-frame "it's the thought that counts", and does not inform the buyer about flowers received in the box, nor the condition.
In the meanwhile BIG DOG has eliminated at least 3-4 middleman / labor cost, and is making a buck based on the volume.
Every DOG is currently doing it - moving toward "shipping" as opposed to "Delivery" - eventually they will not have "florist" affiliation at all.
I am sort of looking forward to it - can not wait to sit back and watch the big ones fight over the takeover of the farms in South America.
 
When I heard this news and read the press releases my thought process went in an entirely different direction.

Read the details, Liberty owns 35% of the stock in the combined company making them the single largest shareholder. Liberty will also be appointing 4 board members bringing the total board up to 11.

While FTD is patting themselves on the back for acquiring Proflowers, it appears to me that Proflowers parent company Liberty Interactive Corporation actually acquired FTD to a great extent. With Liberty holding 35% of the stock and the votes of 4 out of 11 board members they will have a lot of sway. One of the things Liberty brings to the party is the extensive media holdings, I listen to a lot of satellite radio and in the last few years Proflowers has dominated the airwaves ate floral holiday times.

Also keep in mind that Proflowers took the retail flower market by storm and has only been around for less than 15 years, versus FTD's century or so. What this could possibly mean is from a management view that the Proflowers model (direct shipping) offers much more opportunity for rapid growth, an opinion that I believe is shared by FTD based on their attempts to enter it over the last bit.

Bottom line is their is no silver lining in this cloud for the independent retail florist
 
I'm glad to see someone speaking to that point of actual leverage and ownership. Seats on the board + big chunk of stock = tail that wags the dog, no matter what name is on the sign in front of the building.