iParty in Deal to Be Purchased by Party City at $0.45/Share

iParty Corp.

, a leading party goods retailer with a strong presence in New England, announced on Friday, March 1, 2013 that it had entered into a definitive merger agreement under which Party City Holdings Inc. will acquire iParty in an all cash transaction. The transaction has an expected enterprise value of approximately $35 Million, excluding deal expenses, comprised of: * a total equity value of approximately $29 Million for all of the outstanding Common Stock and Preferred Stock, as follows: * acquisition of Preferred Stock for approximately $17 Million; and * acquisition of Common Stock (inclusive of options, less exercise prices) for approximately $12 Million. * assumption of net debt estimated at approximately $6 Million. Preferred Stockholders will receive the greater of their respective liquidation values and their Common Stock conversion values and Common Stockholders will receive $0.45 per share. The purchase price for iParty Common Stock represents a 200% premium over the closing price of iParty Common Stock as of February 28, 2013, the day before the announcement of the transaction. The transaction, which is currently expected to close during the second quarter of 2013, is subject to customary closing conditions, including approval by iParty's shareholders.