“You can’t expect to get a Ferrari for the price of a Honda”

Seattle-based online jeweler Blue Nile has been acquired by Bain Capital Private Equity and Bow Street LLC for $500 million.

blue-nileIn the all-cash deal, the new owners will acquire 100 percent of the outstanding shares of Blue Nile common stock for about $500 million, according to an announcement by the company. It’s stockholders will receive $40.75 in cash per share, which is 34 percent more than it’s closing stock price on Nov. 4.

The company’s stock price jumped 35 percent Monday after the company announced the acquisition. The stock was trading Monday morning at more than $41 a share.

On Monday, Blue Nile (Nasdaq: NILE) also said its third-quarter net sales were down 4 percent compared to a year ago.

The deal is expected to close in the first quarter of 2017. Under the terms of the acquisition agreement, the aquired company may solicit alternative acquisition proposals from third parties during a 30-day “go-shop” period.

A true disruptor

Since its inception, Blue Nile’s guiding principle has been to provide value to its customers, suppliers, and shareholders, and this transaction provides tremendous value to all,” Blue Nile Chairman, CEO and President Harvey Kanter said in a statement Monday morning. “It 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.

Blue Nile’s Board of Directors unanimously approved the deal. It’s stockholders also will have to approve the deal. If so, the company will become a privately-held company and continue to be headquartered in Seattle.

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 provides a clearly superior consumer value proposition and offers a convenient delivery model that enables choice and selection in a no-pressure environment. 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.

A Blue Nile Review

If you search for ‘Blue Nile Review’ you’ll find many comments on the company. We have selected some very relevant extracts for you.

“Blue Nile’s website is very nice both visually and in terms of its functionality. Their loose diamond search feature is easy to use. It’s website contains an incredible amount of information for the diamond shopper to use for research, almost an overwhelming amount, actually. But if you’re thorough and want to know everything, this brand likely covers every topic you have in mind.”

“Blue Nile has a diamond inventory of over 150,000 stones.”

“You can’t expect to get a Ferrari for the price of a Honda, and that applies to Blue Nile. Their prices for Signature Ideal diamonds can be on the high side, but they deliver the highest quality and they do it faster than anyone else.”

“Blue Nile is an online jewelry store that has carved a niche as both an educator and retailer of diamonds and fine jewelry. It emphasizes the concept that choosing a diamond shouldn’t be complicated. Therefore, in addition to its impressive array of loose diamonds and engagement rings, it’s website has comprehensive educational resources that provide valuable instruction and guidance on how to purchase fine jewelry.”


Sylvain Goldberg – on the sale of Blue Nile