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Amazon to Buy Diapers.com for $540 Mln, Fortune Says

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Nov. 7 (Bloomberg) -- Amazon.com Inc. is likely to announce tomorrow the purchase of Quidsi Inc., the parent company of Diapers.com, for $540 million in cash, Fortune reported, without citing anyone.

The offer values Diapers.com at $200 million more than in a recent round of venture capital fundraising, the magazine said in a story published online late yesterday.

Amazon had previously bid for the company, Fortune said. Wal-Mart Stores Inc. also had bid, the magazine said.

Quidsi, founded by Marc Lore and Vinit Bharara, generated about $180 million in revenue last year and is expected to post revenue of about $300 million in 2010. Shareholders include Accel Partners, Bessemer Venture Partners, BEV Capital, MentorTech Ventures and New Enterprise Associates, the magazine said.

The company doesn’t make a profit on selling diapers, instead by retaining customers who buy higher-margin products such as brand-name baby shampoo, wipes and formula, Bloomberg BusinessWeek reported last month.

Amazon began selling diapers in mid-2006, a year after Diapers.com debuted. The company began offering a free three-month trial of Amazon Prime to mothers ordering diapers and other baby items to counter Diapers.com’s free shipping, Bloomberg BusinessWeek said.

There was no answer at a telephone listed for Diapers.com when Bloomberg News attempted to contact the company. Amazon didn’t immediately respond to voicemail and e-mail inquiries.

To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net.

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net.

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