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CONTACT:
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Bruce
Zurlnick
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Leigh
Parrish/Caren Barbara
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Senior
Vice President and
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Media
Contact: Melissa Merrill
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Chief
Financial Officer
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Financial
Dynamics
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Finlay
Enterprises, Inc.
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(212)
850-5600
(212)
808-2800
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FOR IMMEDIATE RELEASE
FINLAY EXECUTES ASSET PURCHASE AGREEMENT
TO ACQUIRE BAILEY BANKS & BIDDLE FROM ZALE
CORPORATION
New York, NY, September 27, 2007 —
Finlay Enterprises, Inc. (NASDAQ: FNLY)
, a leading retailer of fine jewelry operating luxury stand-alone
specialty jewelry stores and licensed fine jewelry departments in
department stores throughout the United States, announced today
that it has executed an asset purchase agreement with Zale
Corporation
(NYSE: ZLC) and
its subsidiaries for the acquisition of the assets and business of
its Bailey Banks & Biddle division, a chain of 70 stand-alone
retail stores operating in 24 states with a focus on the luxury
market, offering jewelry and watches under high-end name
brands.
The
purchase price is $200 million, plus an inventory adjustment
at the time of closing and the assumption of certain
liabilities. The Company expects to finance the transaction
through a new $550 million five-year revolving credit facility
provided by GE Corporate Lending, which would replace its
existing facility. GE Capital Markets, Inc. will act as the
sole lead arranger for the financing.
Management’s
preliminary assessment is that the acquisition should
contribute sales of approximately $280 million to $300 million
in the fiscal year ending January 31, 2009, which will be the
first full year of operation following the expected completion
of the transaction. After taking into account certain
synergies of the transaction, and based on estimated EBITDA in
the range of $23 million to $27 million, management expects
the acquisition should generate earnings accretion in excess
of $0.20 per diluted share in fiscal 2008. The Company plans
to provide further financial details upon the closing of the
transaction, which is expected to occur b y
the end of October 2007.
Arthur
E. Reiner, Chairman and Chief Executive Officer of Finlay
Enterprises, Inc., commented, “The acquisition of Bailey
Banks & Biddle represents a landmark event for our
Company. It fits extremely well into our strategy to grow and
further diversify our business through acquisitions, and
almost triples the number of stand-alone jewelry stores we
operate. This transaction expands our presence in the luxury
market and builds upon our Carlyle acquisition in 2005 and
ou
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