Online jeweler Blue Nile has agreed to be acquired for approximately $500 million by an investor group comprised of funds managed by Bain Capital Private Equity and Bow Street LLC. The group will acquire 100% of the outstanding shares, with stockholders receiving $40.75 in cash per share, a premium of approximately 34% over Blue Nile’s closing price on Nov. 4, 2016. After the sale Blue Nile will become a privately held company, maintaining its Seattle headquarters.
During the past year, Blue Nile had been opening stores in major malls to allow customers to see and try on rings before they placed their orders, according to USA Today. The retailer opened its fourth store in September at the Washington Square mall in Portland, Ore.; its first store opened in summer 2015 at Long Island, N.Y.’s Roosevelt Field mall.
“This transaction provides tremendous value to all,” said Blue Nile CEO Harvey Kanter 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 disruptor in a fundamentally attractive and growing segment of the diamond industry,” said Ryan Cotton, a Managing Partner at Bain. “We believe the company will continue to grow as educated consumers continue to seek easy and convenient shopping experiences that deliver transparent pricing and enhanced value.”
On Nov. 7 Blue Nile released its Q3 2016 financial results simultaneous with the acquisition announcement. The retailer’s net sales of $105.1 million dropped more than $4 million, down from the $109.9 million reported during Q3 2015.
The acquisition is expected to close during Q1 2017. Under the terms of the agreement, Blue Nile may solicit alternative acquisition proposals for a 30-day “go-shop” period following the date of execution of the agreement.