The deal is said to be an all-cash deal. The Investor Group will acquire 100 percent of the outstanding shares of Blue Nile common stock for approximately $500 million and Blue Nile stockholders will receive $40.75 in cash per share, representing a premium of approximately 34 percent over Blue Nile's closing price on November 4, 2016.
"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," said Blue Nile Chairman, CEO and President Harvey Kanter. "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."
Ryan Cotton, a Managing Director at Bain Capital Private Equity said, "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."
Blue Nile's Board of Directors unanimously approved the deal and recommended that stockholders vote their shares in favor of the transaction. Blue Nile will become a privately-held company and continue to be headquartered in Seattle, WA. Closing of the deal is subject to customary closing conditions, including Blue Nile's stockholder approvals and regulatory approvals. There are no financing conditions associated with this.
The transaction is expected to close in the first calendar quarter of 2017. Under the terms of the merger agreement, Blue Nile may solicit alternative acquisition proposals from third parties during a 30-day "go-shop" period, following the date of execution of the merger agreement.
BofA Merrill Lynch is serving as exclusive financial advisor to Blue Nile, and Wilson Sonsini Goodrich & Rosati is serving as its legal advisor. Goldman Sachs & Co is providing debt for the transaction, and Kirkland & Ellis LLP is serving as legal advisor to the Investor Group.
For the quarter ended October 2, 2016, Blue Nile's net revenues in accordance with Generally Accepted Accounting Principles (GAAP) were $105.1 million and net income totalled $1.3 million, or $0.11 per diluted share.