After a meteoric rise and a similar decline, at least in terms of its stock, Seattle-based flash sale site Zulily is selling to retailer QVC in a deal valued at about $2.4 billion in cash and stock.
The site, which targets young moms and their kids with daily deals, is selling for $18.75 per share—about 50 percent higher than the stock was trading Friday. For QVC, the deal brings a company that has made more than $1 billion in net sales during its more than five years in business by offering moms products from more than 10,000 vendors. QVC said about 56 percent of Zulily’s orders are made through mobile devices.
The sale comes almost two years after Zulily took to the public markets with a $253 million initial public offering that gave the company a multi-billion dollar valuation. The company’s stock rose more than 70 percent in the ensuing days after its offering.
But the stock’s high expectations eventually slumped alongside sales expectations. Through Friday, Zulily’s stock was down 46 percent this year to $12.57 per share.
The company emerged from stealth mode in late 2009 with a $4.6 million Series A from Maveron, the Seattle venture capital firm founded by Howard Schultz and Dan Levitan. Zulily had no trouble raising future rounds of capital, or building out new parts of its business, like a shipping arm to accommodate growth. By 2012, it had built up a base of 5 million members and projected sales of more than $500 million.
QVC, which is owned by Liberty Interactive Corp., plans to operate Zulily and QVC as separate consumer brands. Darrell Cavens, the founding CEO of Zulily, is maintaining his role and the company is staying in Seattle.
Liberty Interactive is paying $9.375 in cash and 0.3098 of newly issued shares of QVC trading stock for each Zulily share, the company said in the statement. The company said it expects to fund the cash portion of the deal with cash on hand at Zulily, as well as QVC’s revolving credit facility. The boards of both companies have approved the deal, which is expected to close in the fourth quarter, the statement says.
