QVC’s parent, Liberty Interactive Corp., did a big deal Wednesday. And it smells like a good one.
Liberty and FTD Cos. struck an agreement for the floral company to buy 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 percent of the combined company and $121 million in cash. FTD and Liberty expect to complete the transaction by the end of the year.
How does this affect QVC?
Liberty plans to create two different tracking stocks, namely QVC Group as the umbrella for the home shopping network,Liberty’s stake in HSN; and Liberty Digital Commerce to represent e-commerce businesses such as Provide Commerce.
That stock split will now be delayed.
“Liberty Interactive still plans to create the QVC Group tracking stock, which will be comprised of its interests in QVC and HSN,” the company said in a press release.
“In light of the pending Provide Commerce transaction, and other factors, Liberty is reevaluating the optimal structure and best alignment of the Liberty Digital Commerce Group assets. As a result, the timing of the transition to the QVC Group has been delayed.”
Here is part of Liberty’s statement on its FTD deal.
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.