Private investors score jewel of a deal in $500m acquisition of Blue Nile

Private investors score jewel of a deal in $500m acquisition of Blue Nile

Seattle-based online jeweler Blue Nile has announced that it has agreed to be acquired by a private investor group with funds made up of funds managed by Bain Capital Private Equity and Bow Street LLC. The cash deal is valued at nearly $500 million, according to reports by several news outlets, including Forbes and The Seattle Times.

The deal shot Blue Nile’s stock up by nearly 34 per cent on Monday, the day the deal was announced. Blue Nile stockholders will apparently receive $40.75 per share.

Blue Nile had recently announced its third quarter earnings and showed a drop of 4.3 per cent in net sales. Its stock peaked at nearly $100 in 2007 but shares have fluctuated between $22 and $39 over the past year, due to flat sales as jewelry prices declined.

The deal is expected to close in the first quarter of 2017 pending approval by stockholders and regulators.

The company’s CEO and chairman Harvey Kanter said in a statement: “Blue Nile will continue its innovative drive that has disrupted the diamond industry and made us the smartest, easiest, and most pressure-free way for consumers to buy a diamond.”

“This is an opportunity to acquire a true disrupter in a fundamentally attractive and growing segment of the diamond industry,” said Ryan Cotton, a managing director at Bain Capital Private Equity in The Seattle Times story.

Even with flat sales, the company had attracted new consumers to the jewelry market, including the always-desired Millennial demographic. Cotton noted that Gen Y is looking past traditional jewelers and that shopping for jewelry is different for the latest generations. Blue Nile’s foray into small brick-and-mortar stores and its established online business will give buyers a choice as it enters into its latest phase.

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