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

Media mogul John Malone’s Liberty Interactive on Monday said it would acquire Zulily in a cash-and-stock deal valued at $2.4 billion to tap into the online retailer’s younger clientele and its strong mobile presence.

Zulily, a once red-hot website that hosts “flash” sales of clothing primarily for mothers and children, counts Chinese e-commerce giant Alibaba as one of its shareholders.

Alibaba held about 9 percent of Zulily’s total common stock as of May 15.

The offer of $18.75 per share represents a premium of about 49 percent to Zulily’s Friday close of $12.57. The company’s stock is up 47 percent in early Monday trading.

Zulily shares were off 46 percent this year prior to the Liberty offer as the Seattle company saw its growth slow to a crawl. In both 2012 and 2013, revenue more than doubled from the previous year. In 2014, it was up 75 percent. this year it is expected to rise just 8 percent.

The retailer went public in November 2013 at $22 a share. It hit a high of $72.75 on Feb. 27, 2014 before tumbling to it all-time low of $10.82 in May.

Liberty Interactive, the media conglomerate which owns home shopping network QVC, is known for investing in a range of digital commerce businesses.

Liberty Interactive said it would buy Zulily for $18.75 per share, or $9.375 in cash and 0.3098 newly issued share of Liberty Interactive for each Zulily share.

“Zulily’s younger customer demographic, personalization expertise and e-commerce capabilities will boost QVC,” the companies said in a statement.

In the second quarter ended June 28, about 56 percent of Zulily’s orders were placed from a mobile device, up from about 49 percent a year earlier.

Once the deal closes, expected in the fourth quarter, Zulily will remain based in Seattle and continue to be run by Chief Executive Darrell Cavens.

Goldman Sachs, which led the 2014 IPO, is the financial adviser to Zulily on the sale.