Partnerships / Acquisitions

Blue Nile Acquisition Completes Transition To Private Company

An investor group made up of Bain Capital Private Equity, Bow Street and Adama Partners completed the acquisition of online diamond and jewelry retailer Blue Nile, making it a privately held company.

According to Forbes, the sale was completed last week for $40.75 per share in cash, with the total amount of funds used to complete the deal around $520 million. Trading in Blue Nile’s common stock on Nasdaq will end Feb. 21.

“Blue Nile has disrupted and transformed the way consumers shop for and purchase diamonds and fine jewelry by creating price transparency, while simultaneously providing value to suppliers,” said Blue Nile Chairman, CEO and President Harvey Kanter. “As we enter the next phase of growth, Blue Nile will continue to expand our vision and focus on putting the customer first by reaching them the way they prefer to shop, whether it’s a computer, mobile device or in one of our Webrooms.”

Founded in 1999, the company was created to make choosing an engagement ring simpler for consumers, with the entire process completed online. Within 10 years, it became one of the largest diamond and diamond engagement ring retailers in the U.S. and has more than 200,000 diamonds with grading reports from the Gemological Institute of America or the American Gem Society.

Since its founding, the company said it has served more than 1.7 million customers and sold more than 1 million engagement rings and wedding bands, combined. However, recently, the company’s growth in the U.S. has been waning. On the same day the acquisition was announced, Blue Nile released its third quarter earnings report, which showed a year-over-year net sales decrease of 4.3 percent to $105.1 million for the period ended Oct. 2, 2016.

Yet, in a statement, the new investors believe there is still room for growth with this business.

“Blue Nile is a unique business with a strong platform in an industry that is rapidly evolving and migrating online,” said Ryan Cotton, a managing director at Bain Capital Private Equity. “We are excited to … help Blue Nile continue to lead the transformation of the customer purchase experience in engagement rings and fine jewelry.”

To capture more market share, the company is working to enhance its mobile capabilities, reach consumers through retail outlets, known as Webrooms, and enhance how it digitally displays its products.

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