Classmates.com 2010 Annual Report Download - page 144

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING CHARGES (Continued)
Communications segment eliminated 25 positions. All costs related to the elimination of these positions were recognized and incurred in the
December 2009 quarter.
In the year ended December 31, 2008, the Company recorded restructuring charges totaling $1.7 million primarily associated with the
closure of its Orem, Utah facility and a reduction in headcount in its Communications segment.
12. ACQUISITIONS
FTD Group, Inc.
On August 26, 2008 (the "Closing Date"), the Company completed the acquisition of FTD. Since the acquisition occurred prior to the
effective date of ASC 805, it was accounted for under the purchase method in accordance with SFAS No. 141. The primary reasons for the
acquisition were significant increase in scale, diversification of revenue and cash flow streams, expansion into an attractive market segment and
FTD's market position, and expanded marketing opportunities and efficiencies.
The Company believed that certain of these primary factors supported the amount of goodwill recorded as a result of the purchase price
paid for FTD, in relation to other acquired tangible and intangible assets. In the fourth quarter of 2008, the Company determined that significant
adverse changes in the business climate had occurred and subsequently determined that an impairment charge was necessary (see Note 13).
Each share of common stock of FTD Group, Inc., par value $0.01 per share, issued and outstanding immediately prior to the effective time
of the FTD acquisition was canceled and converted into the right to receive $10.15 in cash and 0.4087 of a share of United Online, Inc. common
stock, subject to the payment of cash in lieu of fractional shares of United Online, Inc. common stock. The total merger consideration was
approximately $307 million in cash, net, and approximately 12.3 million shares of United Online, Inc. common stock.
The FTD acquisition was financed in part with the net proceeds of term loan borrowings under a $425 million credit facility, which
included up to $50 million in a revolving credit facility that was undrawn at the closing of the transaction, with Wells Fargo Bank, National
Association, as lead arranger, and a $60 million credit facility with Silicon Valley Bank. The remaining cash consideration in the transaction was
paid from the Company's and FTD's existing cash on hand.
The total cost of the FTD acquisition was approximately $444.8 million, including expenses incurred in connection with the transaction.
The following table summarizes the components of the purchase price (in thousands):
F-38
Cash consideration, net
$
306,557
Stock consideration (12.3 million shares of United
Online common stock valued at $10.29)
126,151
Transaction costs
12,087
Total
$
444,795