By Alan Hatfield
Online diamond and fine jewelry retailer Blue Nile, Inc. said it will combine with special acquisition company Mudrick Capital Acquisition Corp. II (Nasdaq: MUDS) to become a public company.
Blue Nile CEO Sean Kell will take the helm of the post-combination company along with the current management team, the company said in a statement seen by IPO Edge.
Founded in 1999, Blue Nile is known for its selection of more than 650,000 GIA graded conflict-free diamonds and has expanded from an original focus on diamond engagement rings to a wide range of other fine jewelry, which now accounts for almost half of the company’s revenue. The company offers prices 25-50% less than brick-and-mortar jewelers to e-commerce customers in 44 countries, it said.
The transaction is expected to generate roughly $450 million of capital before expenses, including $80 million of committed PIPE capital from leading institutional investors Bain Capital Private Equity, Bow Street, and Mudrick Capital. Existing Blue Nile shareholders will retain 39% of the combined company’s pro forma equity on a total pro forma implied equity value of $873 million. Pending the approval of Mudrick Capital Acquisition II shareholders, the transaction is expected to be completed in the fourth quarter.
“We are pleased that the Mudrick team will invest in Blue Nile and help accelerate the Company’s next phase of e-commerce leadership in the fine jewelry category,” said David Humphrey, Chairman of the Board of Directors of Blue Nile and a Managing Director at Bain Capital Private Equity. “We believe Blue Nile has a significant opportunity for future market expansion as a real innovator in a large category that offers the right mix of compelling jewelry coupled with an unmatched selection of GIA graded diamonds at unbeatable values.”
Alan Hatfield, Director of Research