The purchase price is $200 million, plus an inventory adjustmentat 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 GECorporate Lending, which would replace its existing facility. GECapital Markets Inc. will act as the sole lead arranger for thefinancing.

"The acquisition of Bailey Banks & Biddle represents alandmark event for our company," noted Arthur E. Reiner, chairmanand CEO of Finlay. "It fits extremely well into our strategy togrow and further diversify our business through acquisitions, andalmost triples the number of stand-alone jewelry stores weoperate."

On the conference call, he explained that the transactionexpands the company's presence in the luxury market and builds uponFinlay's Carlyle acquisition in 2005 and its Congress acquisitionin 2006, increasing its luxury and better specialty business,including Bloomingdales and Lord & Taylor, to over $550million. Management's preliminary assessment is that theacquisition should contribute sales of approximately $280 millionto $300 million in the fiscal year ending Jan. 31, 2009, which willbe the first full year of operation following the expectedcompletion of the transaction. After taking into account certainsynergies of the transaction--which the company noted they wouldexplain further after closing--management expects the acquisitionshould generate earnings accretion in excess of $0.20 per dilutedshare in fiscal 2008.