Lion commits $125m to Spence Diamonds

The firm has teamed up with IVEST Consumer Partners to buy the Canadian engagement ring business

Lion Capital, a consumer-focused firm, has agreed to acquire Spence Diamonds, a direct seller of custom-made engagement rings in Canada.

Lion is partnering with IVEST Consumer Partners, a Vancouver-based retail investor and operator, according to the statement. Financial details of the transaction were undisclosed, but according to a source close to the deal it was an all-equity investment of $125 million, which includes IVEST’s minority stake.

Spence Diamonds, which was founded in 1978, operates seven showrooms across Canada, with each displaying more than 2,500 of the most sought after ring designs.

“We look forward to supporting the continued growth of this distinctive retailer, which we believe delivers a unique proposition within the Canadian jewellery sector. Lion’s deep expertise in successfully driving the rollout of strong branded retail concepts will be critical to supporting Spence’s continued growth through the next phase of its development in new markets,” Eric Lindberg, a partner at Lion, said.

Lion used capital from its Fund III, a €1.53 billion vehicle, which has done 11 deals to date, for the deal. As of June 2014, that fund was delivering a 1.52x net return, according to figures from the Oregon Public Employees Retirement Fund. The firm will use this fund to acquire another two to three businesses, Lion’s founder and managing partner Lyndon Lea told PEI in February.

The investment comes shortly after Lion partially exited its investment in French frozen food business Picard, selling a 49 percent stake to Zurich-based food business ARYZTA.

Lion is currently on the road to collect approximately $2.5 billion for its Fund IV, it is understood. Lion declined to comment on the fundraising.