iParty Corp., the struggling Dedham party goods chain whose stock has been trading at about 18 cents a share over the past year, has agreed to a takeover by rival Party City Holdings Inc. in a deal valued at under $11 million.
The deal comes less than a year after Thomas H. Lee Partners, the Boston private equity firm, acquired a majority stake in New Jersey-based Party City and just months after iParty put itself up for sale.
The proposed purchase of iParty, which operates 54 stores, would give Party City a foothold in New England, Gerald C. Rittenberg, Party City chief executive, said in a statement Friday. Party City has 750 company-owned and franchise locations across North America. One of iParty’s most important seasons is Halloween, and the retailer said its business was hurt by storms two years running, most recently by Hurricane Sandy. In November, iParty said it had hired the investment bank Raymond James & Associates to help the company in “exploring a broad range of financial and strategic alternatives.”
Under the sales agreement, iParty said Party City will buy it for 45 cents a share — a price that represents a 200 percent premium over the closing price of iParty common stock on Thursday. Following news of the impending sale, iParty shares closed Friday at 30 cents, up 96 percent, on the New York Stock Exchange. The transaction is expected to close during the second quarter, iParty said.Jenn Abelson of the Globe staff contributed to this report.