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LI's 1-800-Flowers buys Harry & David for $142.5 million

An employee wraps a floral arrangement on Oct.

An employee wraps a floral arrangement on Oct. 29, 2013, at the 1-800-Flowers headquarters in Carle Place. Credit: Barry Sloan Inc. has made a deal to buy Oregon-based gift basket retailer Harry & David Holdings Inc. for $142.5 million, a move that should help the Long Island company expand its customer base, enhance its gift offerings and broaden its distribution.

News of the deal pushed shares of 1-800-Flowers up as much as 20 percent during the day; the stock closed up 16 percent, at $5.98.

The Carle Place-based online florist and gift company on Tuesday announced the signing of an agreement to acquire Harry & David, a producer of fruit baskets and a variety of holiday-themed gift baskets.

The cash deal includes Harry & David Holdings Inc.'s brands, websites and 47 retail stores throughout the country, including one at Tanger Outlets of Riverhead. It will allow 1-800-Flowers to expand its infrastructure with the takeover of Harry & David's headquarters in Medford, Oregon, the manufacturing and distribution facilities and orchards there, and a warehouse and distribution facility in Hebron, Ohio.

Harry & David filed for Chapter 11 bankruptcy protection in March 2011, when it had reached nearly $200 million in outstanding debt. The company emerged from bankruptcy in September 2011.

The acquisition is expected to close in October, with secured committed funding from JPMorgan Chase and Wells Fargo banks. Harry & David's current senior management will remain with the business, which will become a wholly owned subsidiary of, the companies said.

"The brand will work stand-alone," said Joseph D. Pititto,'s vice president of investor relations, adding integration plans will be determined in 2015. "We really like the management team and the employees there."

With Harry & David revenue reaching nearly $400 million in its most recent reported fiscal year, the combination of companies will increase's total annual revenue to more than $1 billion.

"It is almost a perfect deal," said David Peirez, a merger and acquisition expert and a partner in the Garden City-based law firm Reisman, Peirez, Reisman and Capobianco. "You have two companies that are well established. Sometimes the compatibility between two companies is more important together than separately."

Harry & David's products include Royal Riviera pears, Fruit-of-the-Month Club, Wolferman's English muffins and Moose Munch popcorn. 1-800- Flowers' brands include Fannie May and The Popcorn Factory.

Harry & David shares, which trade over the counter, rose 4.23 percent to $141.75

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