initial public offerings (IPOs) trading on American exchanges

Friday, November 1, 2013

FTD Cos (FTD) began trading on the NASDAQ on 10 October 2013

United Online completes tax-free spinoff of FTD on November 1

The third time going public may be the charm for Downers Grove, Illinois-based FTD Cos., one of the country's largest floral and gift stores.

The flower company's stock opened today at $34.60 on Nasdaq after its spinoff from United Online Inc. Until 1994, the company operated as a nonprofit, then went through a long series of sales and acquisitions as it weathered the dot-com bust and recession.

FTD has not left the weeds just yet: Its earnings statement showed little growth in the third quarter, which ended Sept. 30, but the company noted that that period does not include major gift-giving occasions. Customer orders went up by 11,000 quarter-over-quarter, and revenue increased 2 percent, to $118.5 million.

Rob Apatoff, FTD's CEO and president, said the company is looking forward to a strong fourth-quarter performance. FTD has broadened its customer demographic, he said, by introducing products such as college-themed floral arrangements.

"As we move forward on executing the holidays perfectly and driving innovation, we're maintaining the same drive," Mr. Apatoff said.

This IPO was more than a year in the making. Parent company United Online, an online consumer products and services provider, announced the tax-free spinoff in August 2012 and said the restructuring could happen as soon as the first quarter in 2013.

FTD's IPO comes during a banner year for Chicago IPO volume. Crain's reported in June that the city was approaching $1 billion in IPOs, far ahead of the $655 million raised in five IPOs in all of 2012.

United Online bought FTD back in 2008 as the company was trying to diversify away from its shrinking Internet access business. Before the dawn of widespread broadband from telephone and cable companies, United Online built a successful and profitable business selling dial-up Internet access. The rise of mobile devices with Internet access further eroded United Online's business.

United Online bought a number of Internet companies it felt could help it move away from Internet access to services and content. For instance, United Online still owns and operates people finding services Classmates and StayFriends and also the loyalty marketing program, MyPoints. Over time, FTD's performance continues to run away from the rest of United Online, making it one of the company's brightest spots.

By spinning FTD off, the company can concentrate on its business rather than looking to fund United Online's other initiatives, including a push into providing wireless connectivity. Spinoffs are commonly used, and often successful maneuvers, that allow a company's management to be very focused on success rather than dealing with strains from unrelated businesses.

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