UNTD is planning to spin off its FTD business and will not hold any stake in FTD post-spin-off. The current chairman of UNTD will leave the company as of the spin-off date, and the CEO post-spin-off has yet to be announced. Shareholders were concerned about UNTD’s declining share price due to the weak performance of its social network and internet access services. As a result, UNTD decided to separate the FTD business to provide operational and strategic flexibility, separating high growth FTD assets from weak social network and internet access assets.
The spin-off is expected to improve the focus on the Content & Media segment, with the paid membership losses for Classmates.com slowing down. FTD is expected to take over UNTD’s entire debt, making UNTD debt-free post-spin-off. FTD has shown robust performance, with the best quarter in terms of revenue and EBITDA since its acquisition by UNTD. FTD has an efficient business model that ensures strong cash flow, with upfront payment for deliveries and minimal physical inventory.
Presentation summary generated by ChatGPT