iParty Corp. to be Acquired by Party City

Fri Mar 1, 2013 1:20pm EST

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DEDHAM, Mass. and ROCKAWAY, N.J.--(Business Wire)--
iParty Corp. (NYSE MKT: IPT - news), a leading party goods retailer with a
strong presence in New England, and Party City Holdings Inc., North America`s
largest party supply retailer today announced that they have entered into a
definitive merger agreement under which Party City will acquire iParty for $0.45
per share of iParty Common Stock and the greater of liquidation preference or
conversion value for each share of iParty Preferred Stock, in cash. The purchase
price for iParty Common Stock represents a 200% premium over the closing price
of iParty Common Stock as of February 28, 2013. 

"Party City is a leading player in our industry and we could not be more pleased
with this outcome of the strategic review we initiated last year and the return
it affords to all of our stockholders, both Common and Preferred," said Sal
Perisano, iParty`s Chairman and Chief Executive Officer. "The Party City network
with their Amscan distribution platform will benefit our stores and products by
significantly increasing our scale and broadening our geographic presence. We
look forward to working with Party City and its management team as we integrate
our companies." 

"We are excited to add iParty`s strong platform of retail stores to our
vertically integrated business model," said Gerald C. Rittenberg, Party City`s
Chief Executive Officer. "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." 

The transaction, which is currently expected to close during the second quarter
of 2013, is subject to customary closing conditions, including approval by
iParty`s shareholders. 

Under the Merger Agreement, iParty will actively solicit superior proposals from
third parties for a period of 30 days continuing through March 31, 2013. iParty
does not intend to disclose developments with respect to this solicitation
process unless and until its Board of Directors has made a decision regarding
any superior proposals that may be made. There can be no assurances that this
solicitation will result in a superior proposal. For further information
regarding all items and conditions contained in the definitive merger agreement,
please see iParty`s Current Report on Form 8-K, which will be filed with the SEC
in connection with this transaction. 

In connection with the Merger Agreement, the directors, certain executive
officers and the Estate of Robert Lessin, Robert H. Lessin Venture Capital, LLC
and Boston Millennia Partners, LP, each significant stockholders, have signed
agreements with Party City to vote their shares in favor of the Merger. 

Thomas H. Lee Partners acquired a majority stake in Party City in June 2012.
Ropes & Gray LLP acted as legal advisor to Party City on this transaction. 

Raymond James & Associates, Inc. acted as financial advisor to iParty on this
transaction and Posternak Blankstein & Lund LLP acted as legal advisor. 

About Party City

Party City Holdings Inc. designs, manufactures, contracts for manufacture and
distributes party goods, including paper and plastic tableware, metallic
balloons, accessories, novelties, gifts, stationery and Halloween costumes, and
is North America`s No. 1 party retailer with more than 750 company-owned and
franchise locations throughout the United States, Canada and Puerto Rico.
Headquartered in Rockaway, N.J., Party City became part of the Amscan Holdings,
Inc., family in 2005. With Amscan`s worldwide facilities in Asia, Europe and
Australia, as well as distribution centers in the Americas, the merger has made
it possible to design, manufacture and distribute products in the United States
and overseas. The vision of providing more party for less has made Party City
the largest specialty party retailer and premiere Halloween destination in North
America. Please visit our site at www.partycity.com. 

About iParty Corp.

Headquartered in Dedham, Massachusetts, iParty Corp. is a party goods retailer
that operates 54 iParty retail stores in New England and Florida and an internet
site (www.iparty.com) for costume and related goods and party planning. iParty`s
aim is to make throwing a successful event both stress-free and fun. With an
extensive assortment of party supplies and costumes in our stores and available
at our online store, iParty offers consumers a sophisticated, yet fun and
easy-to-use, resource to help them customize any party, including birthday
bashes, Easter get-togethers, graduation parties, summer barbecues and, of
course, Halloween. In addition to the extensive assortment of costume and
related merchandise available through iParty`s internet site our web site
focuses on increasing customer visits to our retail stores by highlighting the
ever changing store product assortment for all occasions and seasons and
featuring sales flyers, enter-to-win contests, monthly coupons and ideas and
themes offering consumers an easy and fun approach to any party. iParty aims to
offer reliable, time-tested knowledge of party-perfect trends, and superior
customer service to ensure convenient and comprehensive merchandise selections
for every occasion. Please visit our site at www.iparty.com. 

Additional Information and Where You Can Find It

In connection with the proposed transaction, iParty will file a proxy statement
and other relevant documents concerning the proposed transaction with the SEC.
Investors and security holders of iParty are urged to read the proxy statement
and any other relevant documents filed with the SEC when they become available,
because they will contain important information about iParty and the proposed
transaction that should be considered before making a decision about the merger.


The proxy statement (when it becomes available) and any other documents filed by
iParty with the SEC may be obtained free of charge at the SEC`s web site at
www.sec.gov. In addition, investors and security holders may obtain free copies
of the documents filed with the SEC by iParty by contacting David Robertson,
iParty `s Chief Financial Officer, at 781-355-3770. 

iParty and its directors and certain executive officers may, under SEC rules, be
deemed to be participants in the solicitation of proxies from iParty`s
shareholders in connection with the transaction. Information regarding the
directors and executive officers and their respective interests in the Company
by security holdings or otherwise is included in the Company`s proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and information
concerning all of iParty`s participants in the solicitation will be included in
the proxy statement relating to the proposed transaction when it becomes
available. 

Safe harbor statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 as contained in Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. You can identify these statements by the fact that they use words such as
"anticipate," "believe," "estimate," "expect," "intend," "project," "plan,"
"outlook," and other words and terms of similar meaning. These statements
involve a number of risks and uncertainties that could cause actual results to
differ materially from the potential results discussed in the forward-looking
statements. Among the factors that could cause actual results and outcomes to
differ materially from those contained in such forward-looking statements are
the following: conditions to the closing may not be satisfied and the
transaction may involve unexpected costs, liabilities or delays any of which
could cause the transaction not to be consummated and those risks and
uncertainties set forth in iParty`s filings with the SEC. For a more detailed
discussion of risks and uncertainties which could cause actual results to differ
from those contained in the forward-looking statements, see Item 1A, "Risk
Factors" of iParty's most recently filed Annual Report on Form 10-K for the
fiscal year ended December 31, 2011 and our other periodic reports filed with
the SEC. iParty is providing this information as of this date, and does not
undertake to update the information included in this press release, whether as a
result of new information, future events or otherwise.

iParty Corp.
David Robertson, 781-355-3770
Chief Financial Officer
drobertson@iparty.com
or
Party City
Sard Verbinnen & Co.
Robin Weinberg/Devin Broda, 212-687-8080 



Copyright Business Wire 2013

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