Jewelry distributor Quality Gold, Inc. will merge with blank-check firm Tastemaker Acquisition Corp. and go public, the companies said. The deal values the combined entity at $989 million and included proceeds of $279 million from Tastemaker’s trust account.
Special purpose acquisition companies (SPACs) such as Tastemaker are hitting roadblocks these days, as government regulations have become more stringent and economic volatility has made investors cautious, resulting in higher redemptions. SPACs are publicly listed companies that are raised with the intention of combining with private companies, which go public following the merger.
Founded in 1979, Quality Gold serves more than 15,000 retailers and operates in the U.S., Canada, and India, including via e-commerce platforms, independent jewelry retailers, national and regional chains, and department stores. The Ohio-based company manufactures and markets 165,000 jewelry and gift products. It is recognized for its vertical, tech-enabled, and efficient infrastructure, featuring proprietary sourcing, logistics, distribution, and drop shipping capabilities with no minimum order requirements.
Quality Gold also has a proven track record of strategic mergers and acquisitions activity and hopes to use the IPO funds for further M&A. Since 2012, it has successfully completed 12 add-on acquisitions while maintaining consistent growth across economic cycles and outpacing competitors.
“The environment is ripe for an increase in acquisition size and activity, especially as the economic turbulence increases,” said Michael Langhammer in an online investor presentation. “We want to capitalize on the M&A opportunities that we see today.”
The company is “highly selective in our purchases,” he continued. “Many of [our] targets have been family owned without a transition plan, many times we are the only suitor.”
Quality Gold will continue to be led by CEO Michael Langhammer; Michael’s brother, COO Jason Langhammer; and its current senior management team. The Langhammer’s father, David, founded the company. It posted revenue of $534 million for the fiscal year ended March 31, 2022, as well as $82 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization).
The merged entity will trade on the Nasdaq under the new ticker QGLD and will be named Quality Gold Holdings Inc.