Signet Jewelers Agrees to Buy Israel’s R2Net for $328m

Operating under the name JamesAllen.com, U.S.-Israeli company is among world’s biggest online jeweler retailers

A screenshot of JamesAllen.com

Signet Jewelers, the world’s largest retailer of diamond jewelry, said on Thursday that it agreed to acquire R2Net – a U.S.-Israeli online jewelry retailer that operates under the name JamesAllen.com – for $328 million.

The all-cash transaction includes buying Segoma Imaging Technologies, an R2Net subsidiary that provides R2Net with proprietary technology to create 360-degree, high-definition images of diamonds and exacting measurements that facilitate online sales.

Signet operates approximately 3,600 stores in the United States, Britain and Canada, primarily under the name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry, H. Samuel, Ernest Jones, Peoples and Piercing Pagoda.

“This is a highly strategic acquisition for Signet. 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,” said Signet CEO Virginia C. Drosos.

R2Net, which is short for “Rough Diamonds to Internet,” was founded in 2006 by Oded Edelman, James Schultz, Michele Sigler and Dean Lederman. Less than five months ago the U.S. private equity fund Francisco Partners bought half of R2Net from the Israel Growth Partners fund at a reported $300 million valuation.

The company, one of the world’s biggest in online jewelry retailing, employs 200 people, is headquartered in New York City and has research and development centers in Israel. It acquired Segoma, an Israeli startup, in 2015.

Signet said R2Net brands would continue to operate as an independent division and its management team would remain with it. In addition to his role as president of JamesAllen.com, Edelman will become chief digital innovation adviser at Signet.

The R2Net sale comes a day after the U.S. fund Visa Equity Partners said it had reached an agreement to buy Applause, a U.S. company started by Israeli entrepreneurs that helps digital brands to ensure the quality of their website, mobile app and other software.

No prices was given for the sale, but a source at Applause who asked not be identified said the amount was “significantly higher than the capital invested in it as of today – $115 million.”

Applause was founded as uTest in 2007 by Israelis Doron Reuveni, who is CEO, and Roy Solomon, who left several months ago. The company employs 330 people, but only 20 of them work in Israel.

Its customers include companies such as Google, Uber and Michael Kors. It conducts its testing via 300,000-plus professional digital experts.

Applause will continue to operate independently with no changes in executive leadership, the two sides said.