The owner of home shopping network QVC is acquiring five-year-old Internet retailer Zulily Inc. for $2.4 billion in cash and stock, the companies said Monday. QVC's parent, Liberty Interactive Corp., said it will pay the equivalent of $18.75 per Zulily share, representing a roughly 49% premium to Zulily's closing price of $12.57 on Friday. Seattle-based Zulily specializes in limited-time sales, also known as flash sales, and has expanded rapidly over the past five years to hit $1 billion in net sales last year. But its growth has slowed dramatically this year, highlighting the limits of its unusual business model, which is characterized by long delivery times of two to three weeks and a no-returns policy. QVC is best known for selling merchandise over television and it also has an e-commerce site. The companies said that together they would have revenue of more than $10 billion. Zulily's chief executive, Darrell Cavens, has in the past often likened Zulily to the web's version of QVC, saying the two companies share similar selling approaches and customer bases of mostly women. Zulily went public in November 2013 after selling shares at $22 apiece. Within months, its shares surged above $70 as the company reported strong growth in sales and customers. In recent quarters, however, Zulily's sales growth has slowed and its shares have fallen 46% year to date. Liberty Interactive will pay $9.375 cash and 0.3098 share of a QVC tracking stock for each Zulily share. Zulily was halted premarket.
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