Quality Gold has bought Herco, the San Francisco–based gold and platinum chain manufacturer.
Terms were not disclosed. The acquisition is expected to be completed by mid-February. Once it’s completed, Herco’s operations will move from San Francisco to Quality Gold’s headquarters in Fairfield, Ohio.
“Herco will live on as a brand,” said company president Reuven Itelman in a Jan. 19 email, which announced his retirement from the jewelry business after 43 years.
“Please know how grateful I am to…the jewelry community,” he wrote. “To me, nothing is more beautiful than the jewelry business, where art, engineering, and design come together.”
Founded in 1979 by the Itelman family, Herco generated more than $25 million in revenue in 2022, Quality Gold said.
Quality Gold chief operating officer Jason Langhammer said in a statement that “this acquisition accelerates our growth, particularly within the 18k and platinum segments.”
Added Itelman in the same statement: “Quality Gold has a strong relationship with independent jewelers and a plan for Herco to live on.”
Herco is the latest in a series of purchases from Quality Gold, which last year announced its intention to go public by combining with Tastemaker Acquisition Co., a special purpose acquisition company (SPAC).
On Dec. 23, Quality Gold filed a registration statement and prospectus. The transaction is expected to close in the first quarter of the year. If it goes through, Quality Gold will be listed on Nasdaq under the ticker QGOLD.
During a Jan. 9 presentation at the 25th annual ICR Conference in Orlando, Fla., CEO Michael Langhammer said that the company is “highly selective but strategic in our [acquisitions]. Many of the targets have been family owned without a transition plan; many times we’re the only suitor.”
He said that fiscal year 2022 was Quality Gold’s best ever in terms of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), though it recently noticed “hesitation” from its independent jeweler customers.
“We are a real company with profits year after year,” he said. “We want to enhance that growth, and we believe that being public helps us accomplish this goal. We are focused on the long term. My brother [Jason] and I are not cashing out, as we’ll continue to own a large portion of the stock. Take this as a sign of [our] ultimate confidence in the business that we and our employees have built. We want to grow, want to double and we want to double again.”
In 2022, Quality Gold acquired IBGoodman.
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