QVC owner Liberty buying Zulily in about $2.3 billion deal

Liberty Interactive – the media firm that owns buying channel QVC – introduced it can purchase on-line retailer Zulily in a deal value $2.four billion. “For years, as we have told the story of Zulily, Mark and I have compared the consumer experience of shopping on Zulily with how customers engage with QVC and television shopping”.

Liberty Interactive Corporation will be acquiring online retailer Zulily for $2.4 billion. Axiom Securities upped their price target on shares of Liberty Interactive Group from $33.00 to $38.00 and gave the stock a “buy” rating in a research note on Thursday, August 6th. The transaction has been approved by the boards of directors of both companies, and it’s expected to close during the fourth quarter of 2015.

While each company will maintain its distinctive brand identity, this transaction will enable them to expand their product lineup, brand portfolio, and vendor network.

QVC CEO and President Mike George said the goal of combining the two companies was to accelerate the growth in sales. 9 % $ 18.60 whereas Liberty Interactive shares fell as a lot as 4.8 % to $ 28.seventy nine on the Nasdaq.

It is worth mentioning that back in May Alibaba Group Holding Ltd. (NYSE: BABA) bought a 9.3% stake in Zulily, picking up the stock anywhere from $10 to about $13 per share.

“We have no plans at this point for any meaningful consolidation”, said George, who has been promoted to Liberty’s top management board, alongside Liberty founder John Malone and chief executive Gregory B. Maffei as part of the deal.

Liberty Interactive shares were down 1.6%, at $29.78 in its 52-week range of $22.37 to $31.62.

“Right now, it is business as usual, and there is no change to your day-to-day roles and responsibilities”, Zulily said.

After the acquisition by Liberty Interactive, Zulily’s headquarters would remain in Seattle.

Zulily’s example may not be terribly comforting, either, to other so-called unicorns – as venture-backed companies that hit $1 billion in valuation are known. Up to Friday’s close, Zulily’s stock had fallen about 43 percent since its debut in November 2013.

From the perspective of QVC, however, Zulily seems to be a solid acquisition. The merchant has grown rapidly over the past five years, building out a fulfillment network that enables the merchant to run hundreds of limited-time sales per day, and expanding into new categories like women’s apparel, men’s apparel and home décor products. Goldman Sachs is the monetary adviser to Zulily and Weil, Gotshal & Manges LLP and Cooley LLP are its authorized advisers. FBR & Co.’s target price suggests a potential upside of 7.40% from the company’s current price.