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Blue Nile Is Going Public — Again

The deal values Blue Nile at $683M.

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BELLEVUE, WA, AND NEW YORK — Blue Nile Inc., which once traded on the Nasdaq but went private in 2017, plans to become a publicly traded company once again.

The online retailer has entered a business combination agreement with Mudrick Capital Acquisition Corp. II (NASDAQ: MUDS), a publicly traded special purpose acquisition company.

Upon closing of the transaction, the combined company will be named Blue Nile. It’s expected to be listed on NASDAQ.

The post-combination company will be led by Blue Nile CEO Sean Kell and the current management team.

“As the pioneer of and category leader in online fine jewelry, Blue Nile is well positioned to win as the go-to e-commerce destination in the space,” said Jason Mudrick, founder and chief investment officer of Mudrick Capital Management, LP. “With its market leadership, track record as an innovator, talented team, and omnichannel business model, along with its proven growth vectors, Blue Nile fully addresses Mudrick Capital Acquisition Corporation II’s investment criteria. We are excited to partner with Blue Nile as it continues to be a trailblazer in the space.”

Kell said: “Our vision is to help our customers celebrate all of life’s joyful occasions, big and small. Over the past two and a half years we have successfully transformed and elevated Blue Nile as a thriving fine jewelry and lifestyle brand, and we are excited about the growth opportunities that lie ahead. We have only scratched the surface of an estimated $320 billion global fine jewelry market that has been slow to move online and remains fragmented. As we look to execute our growth strategy, now is the right time to become a public company.”

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David Humphrey, chairman of the board of directors of Blue Nile and a managing director at Bain Capital Private Equity, said: “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. 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.”

More about the transaction:

The transaction is anticipated to generate approximately $450 million of capital before expenses, assuming no redemptions by the public stockholders of Mudrick Capital Acquisition Corporation II. This includes $50 million of new preferred equity provided by Mudrick Capital. It also includes $80 million of committed PIPE capital (~$50M of which has been pre-funded) from existing sponsors Bain Capital Private Equity, Bow Street, and Adama Partners, and from Mudrick Capital. Existing Blue Nile shareholders will roll over their existing equity, retaining 39% of the combined company’s pro forma equity. The pro forma implied equity value of the combined company is $873 million at the $10.15 per share PIPE price, assuming no redemptions by the public stockholders of Mudrick Capital Acquisition Corporation II. The transaction implies a pro forma enterprise value for Blue Nile of approximately $683 million.

The Boards of Directors of Blue Nile and Mudrick Capital Acquisition Corporation II have approved the transaction. The transaction, which will require the approval of Mudrick Capital Acquisition Corporation II stockholders, is subject to other customary closing conditions, including the receipt of certain regulatory approvals and a minimum cash condition. It is expected to close early in Q4 2022.

Blue Nile previously was a publicly traded company but went private in February 2017 when it was acquired by an investor group in a $500 million deal. The investor group was made up of funds managed by Bain Capital Private Equity and Bow Street LLC.

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