Liberty Interactive to buy online retailer Zulily in $2.4 billion deal

QVC’s parent Liberty Interactive said Monday that it has entered into a definitive agreement to acquire Zulily for $2.4 billion in cash and stock. Liberty Interactive will pay an equivalent of $18.75 per Zulily share.

Alibaba held about 9 % of Zulily’s complete widespread inventory as of May 15. Cavens has previously compared Zulily to the web’s version of QVC, saying the two companies share similar sales strategies and the demographic of mostly women. “We look forward to welcoming the talented zulily team to the QVC Group as our shared values and beliefs create an incredibly strong foundation for us to collaborate across all aspects of the business and transform how we serve customers in new, digital first ways”.

Zulily Inc. will keep its headquarters in Seattle, and Darrell Cavens will remain as CEO.

The per-share price paid by QVC is below the $22 Zulily got during its initial public offering in November 2013, and far lower than the $73.50 that company shares hit shortly after its IPO.

Both companies will be positioned to thrive through intelligent cross-marketing to a combined customer base of 19 million and millions more email prospects, leveraging QVC’s deep expertise in analytics and zulily’s powerful personalization tools.

John Malone, the chairman of Liberty Interactive who also runs Liberty Media (LMCA), is well known for buying and selling cable and media companies. Considering this transaction, Alibaba’s stake is valued at roughly $223 million.

“Only 6 % of Zulily’s lively clients made a purchase order on QVC”, George stated on a convention name. The acquisition deal is expected to close by the fourth quarter of this year, while Zulily will see no change in management. Liberty Interactive is based in Englewood, Colorado. Concurrent with the execution of the Agreement, zulily’s founding shareholders, representing approximately 45% of zulily’s outstanding shares, have signed a Tender and Support Agreement, pursuant to which they have agreed to tender all of their shares into the exchange offer, subject to certain exceptions. Through Friday, Zulily’s stock was down 46 percent this year to $12.57 per share. Goldman Sachs is financial adviser for Zulily and Weil, Gotshal & Manges LLP and Cooley LLP are acting as legal advisers.

Mike George, QVC’s president and CEO, said the goal of the combination is to accelerate sales growth.