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Blue Nile to be Sold for $500M

3Q Sales Decline 4%, Profit Plummets 35%

Nov 7, 2016 8:27 AM   By Rapaport News
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RAPAPORT... Blue Nile agreed to be acquired by a private-equity investor group as the online diamond retailer’s profit slumped in the third fiscal quarter.

Bain Capital Private Equity and Bow Street will buy all outstanding shares of Blue Nile common stock for $40.75 per share, or about $500 million in total, representing a premium of approximately 34 percent over the closing price November 4. Blue Nile shares jumped 32 percent in pre-market trading.

The takeover is expected to close in the first quarter, the company said.

Blue Nile’s board unanimously supported the offer. The company will “continue its innovative drive that has disrupted the diamond industry” and will remain headquartered in Seattle, Washington, said Harvey Kanter, Blue Nile’s chairman, chief executive and president (pictured).

"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 director at Bain Capital Private Equity.

Blue Nile may receive bids from other potential buyers for 30 days under the terms of the deal.

The takeover comes close on the heels of Blue Nile reporting profit plummeted 35 percent to $1.3 million in the third fiscal quarter that ended October 2. Sales declined 4.3 percent to $105.1 million. U.S. engagement net sales fell 8.5 percent to $59.5 million, while U.S. non-engagement net sales increased 1.2 percent to $25.3 million.
Tags: bain, Bain Capital Private Equity, Blue Nile, Bow Street, buyout, ecommerce, Harvey Kanter, M&A, mergers and acquisitions, online retail, Rapaport News, retail, Ryan Cotton, seattle
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