EToys, BabyUniverse to merge

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Internet retailer and content provider BabyUniverse Inc. and direct marketer eToys Direct Inc. have entered into a definitive agreement for an all-stock merger.

BabyUniverse operates e-commerce Web sites in the brand name baby, toddler and maternity products categories at BabyUniverse.com and DreamtimeBaby.com. It also operates PoshTots.com and PoshLiving.com, which offer luxury furnishings. In addition, the company delivers content to expectant parents via BabyTV.com, PoshCravings.com and ePregnancy.com.

EToys Direct, Denver, owns the multichannel brands eToys and My Twinn Doll Company and operates KB Toys under a licensing agreement.

In addition to the complementary product offerings, the companies are a strategic match in that each believes in a balanced business model of e-commerce and content.

Immediately following the completion of the merger, BabyUniverse, Jupiter, FL, shareholders will own about one-third of the shares outstanding of the combined company and eToys shareholders will own about two-thirds.

The deal is expected to close in the second or third quarter of 2007.

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