Alloy to Buy Delia’s

Jul 31, 2003 9:30 PM  By

In a blockbuster deal, teen apparel and sporting gear cataloger Alloy agreed on July 31 to buy its closest rival, teen apparel and accessories cataloger/retailer Delia’s Corp. for $50 million. The combined company will have annual sales of roughly $300 million and a database of more than 20 million names.

To run the combined company, Alloy has hired former J. Crew chief operating officer Walter Killough, Jr. “We will be pursuing opportunities to hire other senior executives attracted to this unique property in the dynamic youth market,” Alloy chairman/CEO Matt Diamond said in a statement. He added that Alloy plans to be proactive in exploring “value-creating transactions involving the merchandise business, including receipt of a strategic investment, merger, an outright sale, or a full or partial leveraged spin-off to the public.”

The deal is scheduled to close during Alloy’s fiscal third quarter, which closes at the end of October. Alloy will acquire all of the outstanding shares of Delia’s common stock for $0.928 a share in cash. The tender offer, to be made by Alloy subsidiary Dodger Acquisition Corp., is expected to begin by Aug. 6. It will be followed by a second step merger in which those shares not tendered will be converted into the right to receive the same $0.928 per share in cash.