BabyUniverse gets a bundle of joy with $2.5 million equity investment

BabyUniverse Inc., an online retailer of baby and toddler-oriented merchandise and a provider of online content for expectant and new parents, has secured a $2.5 million private placement transaction with an unnamed “large institutional investment fund.”

In connection with the investment, the company plans to issue 317,259 shares of Series A convertible preferred stock and warrants to acquire 79,316 shares that will convert to common stock once the proposed merger with eToys Direct Inc. closes later this year. Shares were priced at $7.88 per share, the closing price of the company’s common stock on May 24.

“We are pleased to have priced this investment at the market price of our stock,” says chairman and CEO John Textor. “In consummating this transaction we have taken one additional step closer to completing our proposed merger with eToys Direct Inc.”

The company will use the proceeds for general corporate purposes.

BabyUniverse is No. 207 in the Internet Retailer Top 500 Guide.