Liberty Interactive Corporation, which sold Backcountry.com to a private equity group for $350 million in July, has entered into a definitive agreement to acquire all outstanding shares of Zulily, a Seattle-based online retailer that has had success reaching younger shoppers with a selection of apparel and footwear brands, including some outdoor and athletic lifestyle brands.

The acquisition will be attributed to Liberty Interactive’s QVC Group tracking stock. While QVC and Zulily will be operated as separate consumer facing brands, the collaboration creates numerous opportunities, including leveraging QVC’s global scale, curation, vendor relationships and video commerce expertise at Zulily. Similarly, Zulily’s younger customer demographic, personalization expertise and e-commerce capabilities will boost QVC.

Following the close of the transaction, Zulily will remain based in Seattle. Zulily will continue to be run by its management team, with Darrell Cavens remaining President and CEO of Zulily. In connection with the transaction, Mike George is being appointed to the Executive Committee of the Liberty Interactive Board of Directors and will serve on that committee with John Malone and Greg Maffei. Darrell Cavens will report directly to Mike George and the other members of the Executive Committee. In addition, Zulily co-founder Mark Vadon will join the Liberty Interactive Board of Directors.

The deal values Zulily at $2.4 billion, or $18.75 per share, or 54 percent below its 52 week high and ever below its 2013 IPO price and calls for Liberty Interactive to provide $9.375 in cash and 0.3098 newly issued shares of QVCA for each Zulily share. Funding for the cash portion of the consideration is expected to come from cash on hand at Zulily and QVC’s revolving credit facility.

The transaction has been approved by the boards of directors of both companies and is anticipated to close during the fourth quarter of 2015. Pursuant to the Agreement, a subsidiary of Liberty Interactive will commence an exchange offer for 100 percent of the outstanding shares of Zulily common stock for $18.75 per share. The exchange offer is required to be commenced within 15 business days of today and to remain open for at least 20 business days after launch.

Concurrent with the execution of the Agreement, Zulily’s founding shareholders, representing approximately 45 percent of Zulily’s outstanding shares, have signed a Tender and Support Agreement, pursuant to which they have agreed to tender all of their shares into the exchange offer, subject to certain exceptions. Following successful completion of the exchange offer, any shares not acquired in the exchange offer will be acquired in a second-step merger at the same $18.75 per share deal price. Closing of the exchange offer is conditioned upon customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and there being validly tendered and not withdrawn a number of shares of Zulily common stock equal to at least a majority of the total outstanding voting power. The offer is not subject to any financing condition.

Baker Botts L.L.P. is acting as legal advisor for Liberty Interactive. Goldman Sachs is serving as financial advisor for Zulily and Weil, Gotshal & Manges LLP and Cooley LLP are acting as legal advisors.

Liberty Interactive Corporation attributes its interests in a broad range of digital commerce businesses to two tracking stock groups: the QVC Group and the Liberty Ventures Group. The businesses and assets attributed to the QVC Group (Nasdaq: QVCA, QVCB) consist of Liberty Interactive’s subsidiary, QVC, Inc., and its interest in HSN, Inc., and the businesses and assets attributed to the Liberty Ventures Group (Nasdaq: LVNTA, LVNTB), consist of all of Liberty Interactive Corporation’s businesses and assets other than those attributed to the QVC Group, including its interest in Expedia, Interval Leisure Group and FTD, its subsidiaries Bodybuilding.com, CommerceHub, LMC Right Start and Evite, and minority interests in Time Warner, Time Warner Cable and Lending Tree. Backcountry.com was part of that group until its sale last month.

Shares of Zulily, which was launched in 2010, are traded on the NASDAQ Global Select Market under the symbol ZU.