(Filed Under Financial and General Interest News). iParty Corp. “announced that it had entered into a merger agreement with Party City Holdings Inc.” in a filing with the SEC. The deal is valued at about $35 million. With 47 of its 52 stores located in New England, the company’s Halloween business was devastated by Hurricane Sandy, the second year in a row that a major storm hit the area at the time of the holiday.
The sales of iParty comes as the publicly traded firm announced its second major annual loss in row. For the full year 2012 iParty lost $1,536,430 on sales of $79,094,317 compared with a loss for 2011 of $1,314,638 on sales of $ 80,882,751.
According to the 8K filing, “The consummation of the merger is subject to customary conditions to closing, including the approval of iParty’s stockholders, and is expected to close in the second quarter of 2013.” In the deal, Party City is acquiring all the preferred stock for about $17 million, all the common stock for about $12 million and is assuming about $6 million in debt.
In a filing with the SEC, Sal Perisano, iParty’s chairman and CEO, stated, “For the second consecutive year, a weather event affected our fourth quarter and annual performance. The anticipation of Hurricane Sandy affected our sales the week leading up to Halloween and hit our primary market on October 29th, knocking out power and closing a number of our stores in southern New England. This storm was the major cause of the loss we sustained for the year, and our business remains otherwise healthy. Despite the unfortunate timing of this Hurricane, sales in our non-seasonal categories remained solid through the year helping us regain positive momentum going into fiscal 2013.”
In a press release announcing the acquisition, Gerald Rittenberg, Party City’s CEO declared, “We are excited to add iParty’s strong platform of retail stores to our vertically integrated business model. By joining forces, we enhance our leadership position and accelerate our growth throughout New England, a densely populated region where we currently do not have a market presence. We have maintained a relationship with iParty for many years and have long admired their strong management team and well-recognized brand. We look forward to working together to expand our combined geographic footprint and brand presence on a national scale.”
Even before the merger, Party City maintained in press documents that it was “North America’s No. 1 party retailer with more than 750 company-owned and franchise locations throughout the United States, Canada and Puerto Rico.” In 2005 it become part of Amscan Holdings, Inc.
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