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Perfumania Announces Proposed Merger With Parlux

Posted: December 27, 2011

Perfumania Holdings, Inc. and Parlux Fragrances, Inc. announced the signing of a definitive merger agreement under which Perfumania would acquire all of the outstanding shares of Parlux. The transaction is valued at approximately $170 million, based on Perfumania's closing stock price of $19.55 per share on Dec. 22, 2011. Based on that Perfumania stock price and depending on the stockholder elections described below, the merger agreement values a share of Parlux stock at between $7.91 and $8.55, assuming no adjustments under the merger agreement other than such elections. Parlux's closing market price on Dec. 22, 2011, was $3.40 per share, and there were 20,769,362 shares of Parlux common stock outstanding on that date.

Perfumania is a U.S., vertically integrated wholesale distributor and specialty retailer of designer perfumes and fragrances. Parlux is a manufacturer and international distributor of prestige fragrances and beauty related products, and is one of Perfumania's largest trading partners. This strategic transaction, which is expected to create a more efficient and competitive company that would provide greater value to stockholders and better service to the parties' customers, has been unanimously approved by the independent committees of the boards of directors of both companies.

"The combination of Perfumania and Parlux is a major step toward building a more significant and financially stronger designer fragrance and beauty products company," said Mike Katz, president and CEO, Perfumania. "Parlux brings a wealth of products and expertise as a licensee, manufacturer and international distributor."

Among benefits for Parlux stockholders, Fred Purches, Parlux's chairman and CEO, emphasized the potential for a significantly stronger, combined company to deliver a broader range of product to its customers.

Following the merger, the Nussdorf family, members of which are the beneficial owners of approximately 82% of Perfumania's outstanding shares and 11% of Parlux's outstanding shares, are expected to continue to own a majority of Perfumania's outstanding shares.