Nexus Buys FTD Assets

Nexus Capital Management, through newly formed Gateway Mercury Holdings, has acquired FTD, an online florist and gift company for $118 million.

The purchase of FTD follows the firm’s winning bid at an auction held on July 31, 2019 for certain assets of FTD Companies, Inc., including the FTD and ProFlowers brands and the FTD florist network. FTD filed for bankruptcy in June 2019 as a result of an overburdened balance sheet – the company had borrowed $200 million in 2014 to acquire its competitor ProFlowers for $430 million – and a very competitive online operating environment. Last year, total sales for FTD fell 7 percent to just over $1 billion and the company recorded a $225 million net loss. In a separate transaction through the bankruptcy court, publicly traded 1-800-Flowers.com (through holding company SBGF Acquisition) will acquire FTD’s gourmet foods business for just over $20 million.

FTD operates one of the largest florist networks in the world with over 30,000 floral shops in more than 125 countries. FTD partners with local florists to hand-craft floral arrangements available for same-day delivery on FTD.com and ProFlowers.com.

The company also provides technology, marketing, and digital services to the members of its florist network. FTD is headquartered in the Chicago suburb of Downers Grove (www.ftd.com) (www.ProFlowers.com).

Florists’ Telegraph Delivery (FTD) was founded in 1910 by thirteen American florists led by John Valentine to serve each other’s out-of-town customers by exchanging orders via telegraph. In 1965, the company began offering international orders and changed its name to Florists’ Transworld Delivery. In 1994, private equity firm Perry Capital acquired the company for $130 million and later, in 2004, sold the company for $450 million to Leonard Green & Partners. FTD was acquired by publicly traded United Online in 2008 for $754 million. In 2013, United Online spun off FTD and it began trading on the NASDAQ under the symbol FTD.

“Nexus invests in leading companies and management teams across industries,” said Damian Giangiacomo, a partner at Nexus. “With FTD, we see strong long-term potential in the company’s brand, digital platform, and global network of over 30,000 florists across more than 125 countries. We have established a new capital structure and strategic plan designed to renew growth and profitability, which will rapidly enable investments in FTD’s network of florists and digital platforms to build on the company’s heritage.”

With the closing of the transaction, Nexus has named Jeff Clarke as the executive chairman of FTD. Mr. Clarke is the former CEO of travel technology firm Travelport from 2006 to 2011; the chairman of Orbitz Worldwide, a travel fare aggregator website, from 2007 to 2014, and CEO of Eastman Kodak from 2014 to 2019.

“We are pleased to announce that Jeff Clarke will join FTD as executive chairman,” added Mr. Giangiacomo. “Jeff played a key role on our deal team during due diligence and in building the strategic and operating plan for FTD going forward. Jeff’s leadership at Kodak, Travelport and Orbitz included consumer and enterprise sales, e-business optimization, and technology development, which are critical experiences for FTD to secure the many opportunities we see for the company.”

“I am excited to lead FTD under its new private ownership with Nexus,” said Mr. Clarke. “FTD will focus on growth through its unparalleled network of florists, improved digital capabilities, brand investment and enhanced partnerships with sales channel affiliates in the industry.”

FTD’s CEO Scott Levin will continue with the company as vice chairman, chief administrative officer and general counsel; Jay Topper, FTD’s EVP and chief digital officer, and Tom Moeller, the company’s EVP of the Florist Division, will also continue as members of FTD’s executive leadership team. “I would like to thank Scott Levin for his leadership as FTD’s CEO during the past year and for effectively guiding the company through the transition process to new ownership. We are excited to partner with Scott and the company’s talented group of employees, florists and other stakeholders in achieving the company’s next phase of growth,” added Mr. Clarke.

Nexus makes investments of $20 million to $150 million in opportunistic credit, structured investments, and private equity across a range of industries including industrials, consumer & retail, food & beverage, services, education, and distribution & logistics. The firm was co-founded in 2013 by ex-Apollo Global professionals Damian Giangiacomo and Michael Cohen and is headquartered in Los Angeles (www.nexuslp.com).

© 2019 Private Equity Professional | August 26, 2019

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