Less than two years after going public with a flashy IPO, e-commerce company Zulily has agreed to be sold to Liberty Interactive, which owns home shopping network QVC, in a deal worth $2.4 billion.
Liberty (QVCA), which is part of billionaire John Malone’s media empire, will pay $18.75 for each Zulily share in a cash-and-stock deal that represents a premium of about 49% over the website’s Friday closing price, the companies announced on Monday morning.
Zulily (ZU), which is known for its flash sales for products ranging from toys to children’s apparel and maternity clothing, saw its stock soar in a November 2013 initial public offering, but stagnant sales growth in the past year left the company ripe for a takeover. The Wall Street Journal noted earlier this month that Zulily, which had grown to top $1 billion in net sales last year, saw year-over-year sales growth of just 4% in the most recent quarter as the number of customers shopping on the site plateaued.
Zulily’s stock, which topped $40 per share as recently as May 2014, plunged more than 65% over the past 12 months.
While Zulily and QVC will continue to be operated separately, Liberty Interactive CEO Greg Maffei said in a statement that Zulily “fits perfectly with the QVC philosophy” and there will be room for the two companies to complement one another, including combining QVC’s video commerce business model with Zulily’s web presence. “Combined under Liberty, we have an incredible opportunity to delight shoppers from the TV to the Internet,” Maffei said.
UPDATE: For more on the transaction and Zulily’s road to the sale, Coins2Day‘s Dan Primack spoke with Zulily CEO Darrell Cavens.