Specialty floral and gifting retailer FTD Companies Inc. has filed for Chapter 11 bankruptcy.
In its filing in the U.S. Bankruptcy Court for the District of Delaware, FTD said it has made “significant progress” in reaching agreements to sell different parts of its business to different buyers. These agreements include a definitive asset purchase agreement with an affiliate of Nexus Capital Management LP to acquire FTD's North America and Latin America consumer and florist businesses, including ProFlowers, for $95 million in cash; a non-binding letter of intent with a strategic investor to acquire its Personal Creations brand; a non-binding letter of intent with Farids & Co. LLC, owned by Tariq Farid, founder of Edible Arrangements, to acquire Shari's Berries; and completing the sale of U.K.-based Interflora to a subsidiary of The Wonderful Company for $59.5 million in cash.
In the filing, FTD also said it intends to use the court-supervised restructuring process to support and protect its ongoing business operations, including its relationships with member florists and business partners, to enable the potential sales of its businesses and to address a near-term debt maturity. All of FTD’s businesses are currently operating as usual.
FTD has received commitments for up to approximately $94.5 million in debtor-in-possession ("DIP") financing from a syndicate comprised of its existing lenders. Upon approval by the bankruptcy court, this financing, combined with cash generated from ongoing operations, will be used to, among other things, support the business during the court-supervised restructuring process.
FTD expects that the company's common stock will be delisted from the Nasdaq Stock Market for non-compliance with marketplace rules as a result of the Chapter 11 filing. FTD does not expect stockholders to receive any recovery at the end of the court-supervised restructuring process.
"The important actions we are taking today are designed to enable us to continue supporting our network of florists and business partners and serving consumers while we work to complete the initiatives coming out of our strategic review," said Scott Levin, FTD's president and CEO. "Over the last several months, we conducted a robust strategic review to determine the best path forward for our company. With the advice and support of our outside advisors, we have initiated this court-supervised restructuring process to provide an orderly forum to facilitate sales of our businesses as going concerns and to enable us to address a near-term debt maturity."
Jones Day is serving as legal advisor to FTD, Moelis & Company LLC and Piper Jaffray & Co. are serving as its investment bankers and financial advisors, and AP Services LLC, an affiliate of AlixPartners, is providing chief restructuring officer services.