Finlay Enterprises Inc. said Thursday it has inked an agreement to buy the assets and business of jewelry chain Bailey Banks & Biddle from Zale Corp. for $200 million, plus an inventory adjustment and the assumption of certain liabilities.

Finlay, a retailer of jewelry specialty stores, said it will finance the purchase through a new, $550 million five-year revolving credit facility. The transaction is expected to close by the end of next month.

Finlay also said it expects the acquisition will contribute sales of between $280 million to $300 million to its fiscal year ending Jan. 31, 2009, the first full year of operation following completion of the transaction.

"The acquisition of Bailey Banks & Biddle represents a landmark event for our Company. 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. This transaction expands our presence in the luxury market and builds upon our Carlyle acquisition in 2005 and our Congress acquisition in 2006, increasing our luxury and better specialty business, including Bloomingdale's and Lord & Taylor, to over $550 million," said Arthur E. Reiner, chairman and chief executive officer of Finlay, in a statement.

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