Online teen marketer Alloy Inc. has entered an agreement to buy Delia’s Corp., a seller of apparel to teenage girls, for approximately $50 million.
Under the terms of the deal, Alloy will acquire all of the outstanding shares of Delia’s common stock for $0.928 per share in cash, according to a statement released this morning. Based on an assumed total of approximately 53.9 shares outstanding, the deal totals a purchase price of $50 million.
The transaction is expected to close during Alloy’s third fiscal quarter.
“We believe the combination will create the premier teen multi-channel merchandise business, with a $300 million annual revenue base; a merged database of over 20 million names; a stable of recognized distribution brands; and strong growth platforms in direct marketing, retail stores and product licensing,” said Matthew Diamond, Alloy’s chairman, in a statement.
Delia’s operates a print catalog, a Web site (www.delias.com) and 64 retail stores.
Alloy hired Walter Killough Jr., the former COO of J. Crew to ensure a smooth transition, according to Kurt Genden, spokesman for Alloy.
Stockholders representing about 35% of the outstanding shares of Delia’s have agreed to tender their shares and to vote in favor of the proposed merger. So while both boards have approved the transaction, it’s really only 35% there, Genden noted.
Delia’s reported a loss of $7.3 million for the first quarter ended May 3, 2003. The loss for first quarter 2002 was $4.3 million. Net sales for the quarter were $29.5 million, compared with $28.8 million in the prior year.
Alloy has been on a buying binge in recent months. It acquired direct marketing firm Off Campus Marketing for $15.6 million in cash in May. It also bought YouthStream Media Network’s Media and Marketing Services unit and purchased Old Glory Boutique Distributing for $9.6 million in cash.
Previous acquisitions include 360 Youth, BMX biking site Dan’s Competition and CASS Communications.