Diamond retailer Signet Jewelers Ltd. (NYSE: SIG) is purchasing R2Net Inc., the owner of online jewelry shop JamesAllen.com, for $328 million in cash. The deal brings digital capabilities to Signet, as the retail landscape has been transformed by e-commerce and new shopping behaviors.

Founded in 2006, R2Net is an e-commerce and supply chain service provider for the diamond industry. The New York-based target operates online jeweler retailer JamesAllen.com and sells three-dimensional photography machines under the Segoma Imaging Technologies brand. The machines help to capture a diamond’s unique characteristics from nearly every angle, according to the company. R2Net also operates tech innovation centers in Israel, and an around-the-clock customer service facility in Frederick, Maryland.

“This is a highly strategic acquisition for Signet,” states Signet CEO Virginia Drosos. “The James Allen brand and R2Net’s technologies and innovative approach present a unique opportunity to rapidly enhance our digital capabilities and create a distinctive customer shopping experience which more seamlessly integrates our digital and physical retail platforms.”

Signet is one of the largest retail jewelers in the U.S., U.K. and Canada. The buyer operates nearly 3,600 brick and mortar diamond and jewelry stores. Signet owns a number of well-known jewelry store brands, including: Kay Jewelers, Zales, Jared the Galleria of Jewelry, H. Samuel, Ernest Jones, Peoples and Piercing Pagoda. The R2Net deal accelerates Signet’s customer-first omnichannel strategy, all while adding a millennial online retail brand to the portfolio.

Other middle-market jewelry and accessory deals include: Aldo Group Inc.'s acquisition of Camuto Group for its footwear and accessories businesses, and Bain Capital Private Equity and Bow Street LLC's joint deal to buy online diamond ring seller Blue Nile LLC.

J.P. Morgan Securities LLC (NYSE: JPM) is serving as financial adviser to Signet, while Weil, Gotshal & Manges LLP is acting as legal counsel. Meitar Liquornik Geva Leshem Tal is serving as legal counsel to R2Net on this transaction. The deal will be financed with a loan from J.P. Morgan Chase Bank.

JamesAllen.com

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