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.

"The acquisition of Bailey Banks & Biddle represents a landmark event for our company," noted Arthur E. Reiner, chairman and CEO of Finlay. "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."

On the conference call, he explained that the transaction expands the company's presence in the luxury market and builds upon Finlay's Carlyle acquisition in 2005 and its Congress acquisition in 2006, increasing its luxury and better specialty business, including Bloomingdales and Lord & Taylor, to over $550 million. Management's preliminary assessment is that the acquisition should contribute sales of approximately $280 million to $300 million in the fiscal year ending Jan. 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--which the company noted they would explain further after closing--management expects the acquisition should generate earnings accretion in excess of $0.20 per diluted share in fiscal 2008.