Press Releases

From the latest breaking news to media galleries, find a range of information on IAC and our businesses.

Press Releases

BACK

IAC/InterActiveCorp to Acquire Cornerstone Brands, a Leading Catalog and Online Retailer

Tuesday, March 1, 2005 - 01:00

IAC/InterActiveCorp (NASDAQ: IACI) announced today that the company is acquiring Cornerstone Brands, Inc., a portfolio of leading print catalogs and online retailing sites that sell home products and leisure and casual apparel, from a group of private investors, including principal shareholders Madison Dearborn Partners and JP Morgan Partners. The transaction value is $720 million net of expected tax benefits.

The company will join IAC's Electronic Retailing unit and HSN. HSN Catalog Services, consisting of Improvements and Alsto's, will become part of Cornerstone Brands. This will provide HSN Catalog services with access to Cornerstone's state-of-the-art centralized platform and allow the companies to share in significant cross-promotional benefits.

Thomas J. McInerney, EVP and CFO of IAC and CEO of IAC Electronic Retailing, said, "This arrangement enables us to immediately and significantly increase our position as one of the world's leading interactive retailers by expanding our presence across the multiple channels of catalog, TV, and online. Catalog shoppers have been the fastest retail shoppers to migrate online and aligning the promotional power of TV and the catalog, together with the convenience and dynamic experience of the Internet, will provide compelling shopping experiences for current and new customers. Internet retailing is a substantial and expanding part of the overall retail landscape, and with this acquisition we are well positioned to capitalize on this trend. We expect this transaction to be accretive to our earnings, and to drive continued organic growth, and provide a platform for add-on investments."

The Cornerstone Brands portfolio includes the catalogs and websites of Frontgate, Ballard Designs, Garnet Hill, Smith and Noble, The Territory Ahead and TravelSmith. The company reported revenues, EBITDA, and Operating Income Before Amortization of $720 million, $66 million and $59 million, respectively, for the fiscal year ended January 29, 2005.

Cornerstone is an industry leader in direct marketing and multi-channel merchandising, with more than 2 million active customers. Cornerstone's distinctly unique, proprietary and exclusive product line (65% of sales revenue) enables the Company to continuously outpace the category, with top- line growth averaging more than 19% per year for the past 2 years.

Marty Nealon, President of HSN U.S., said, "HSN's mission is to provide great products and compelling shopping experiences to its customers. The individual brands of the Cornerstone group are leaders in their categories, and they will add tremendous breadth and variety to our on-air and online programming. We will seek to develop meaningful ties between the HSN and Cornerstone brands and consumer bases, share our significant Internet experience to further Cornerstone's online presence, and leverage operating efficiencies. We are excited to welcome the talented Cornerstone team to IAC and HSN."

John Schaefer, currently President and COO of Cornerstone Brands, said, "All of us at Cornerstone are extremely excited to be joining IAC and particularly our new colleagues at HSN. We see this event as a testament to the hard work of everyone at Cornerstone, in that it resulted in the interest and eventual acquisition of our company by one of the leading e-commerce enterprises in the world. Individually and collectively our brands are positioned for continued growth, and our access to the TV retailing and interactive expertise of HSN and IAC will elevate our natural course, especially online."

Wachtell, Lipton, Rosen & Katz acted as legal advisor and Lehman Brothers as financial advisor to IAC during this transaction. Kirkland & Ellis and Taft, Stettinius & Hollister acted as legal advisors and JPMorgan Securities Inc. and GLC Securities Corp., an affiliate of Gruppo, Levey & Co. acted as financial advisors for Cornerstone Brands.

  The transaction is expected to close during the second quarter of 2005.

  About Cornerstone Brands

Founded in 1995, Cornerstone Brands, Inc. is a family of leading multi- channel retailers of home, leisure and casual apparel products to affluent U.S. consumers.

About IAC/InterActiveCorp

IAC operates leading and diversified businesses in sectors being transformed by the internet, online and offline ... our mission is to harness the power of interactivity to make daily life easier and more productive for people all over the world. To view a full list of the companies of IAC please visit our website at http://iac.com/.

   CONTACTS:
   For IAC:
   IAC Corporate Communications
   Deborah Roth 212/314-7254
   Andrea Riggs 212/314-7280

   IAC Investor Relations
   212/314-7400
   Roger Clark
   Lauren Porat

   For HSN:
   Darris Gringeri
   727/872-4567

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. These forward-looking statements include statements relating to IAC's anticipated financial performance, business prospects, new developments and similar matters, and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," or similar expressions. These forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those suggested by the forward-looking statements due to a variety of factors, including changes in business, political, and economic conditions due to the threat of future terrorist activity, actions and initiatives by current and potential competitors, the effect of current and future legislation or regulation, the ability to expand our reach into international markets, and certain other additional factors described in IAC's filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on IAC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. IAC is not under any obligation and does not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

   Reconciliations of Cornerstone EBITDA to operating income
   ($ in millions)
                                                         FYE
                                                      1/29/2005
   EBITDA                                                 $66.1
   Depreciation                                             6.5
   Operating Income Before Amortization                   $59.6
   Amortization                                              --
   Operating income                                       $59.6


  (Logo:  NewsCom:  http://www.newscom.com/cgi-bin/prnh/20031105/NYW076LOGO
          AP Archive:  http://photoarchive.ap.org/
          PRN Photo Desk, photodesk@prnewswire.com )

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20031105/NYW076LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: IAC/InterActiveCorp

CONTACT: Deborah Roth, +1-212-314-7254, or Andrea Riggs,
+1-212-314-7280, both of IAC Corporate Communications, or Roger Clark, or
Lauren Porat, +1-212-314-7400, both of IAC Investor Relations; or Darris
Gringeri for HSN, +1-727-872-4567

Web site: http://www.iac.com/

button Scroll Up