FTD Group Inc , the largest floral company in the world, has hired investment bank Goldman Sachs to explore the possibility of selling the company, according to sources familiar with the matter.
The move comes amid an 8-month surge in FTD’s stock price and roughly 19 months after FTD’s private equity owners took the company public.
Bankers and private equity investors said talk of this move by FTD has floated in and out of the market for several months. Bids for the company could be submitted as early as December, these sources said.
FTD, based in Downers Grove, Illinois, is majority owned by Los Angeles private equity firm Leonard Green & Partners, which holds 54.9 percent of the company’s shares outstanding, according to Reuters Data.
Leonard Green and Goldman Sachs both declined to comment. FTD did not immediately return calls seeking comment.
FTD’s potential sale comes as its stock is on a tear, up around 90 percent since hitting a 52-week low of $9.02 on March 13.
The stock’s upswing marked a sudden turn from a steady drop following its February 2005 initial public offering. The IPO priced at around $14 a share, fell on its opening day and didn’t return to that level until July 2006.
The company’s market capitalization is currently $483 million, according to Reuters data.
Given FTD’s straightforward business model and steady cash flow, it is likely to attract a raft of private equity bidders. These firms seek cash flows to pay down debt used to fund their deals, and as non-trade buyers, they like businesses they can easily understand.
FTD provides floral-related products and services to consumers and retail florists in the United States, Canada and Britain. The company’s consumer business operates primarily through www.ftd.com. Its well-known Mercury Man logo is displayed in about 50,000 floral shops globally, according to the company.
Leonard Green agreed to buy FTD and take it private in October 2003, paying $24.85 per share or around $420 million for the company at a time when it was losing market share to 1-800-Flowers.com Inc. and other rivals. Its previous owners included Perry Capital, a hedge fund, and private equity firm Bain Capital.
After bringing the company back to the public market last February, Leonard Green pared its ownership stake to around 50 percent from more than 90 percent.
FTD hired a new chief financial officer in June and said its existing CFO would remain a director, without explaining a reason for the shuffle.
In July, FTD agreed to buy Britain’s Interflora Holdings Ltd. for $121 million, a move that FTD said would give it a base to expand in Europe.