Diamonds / Gold / Industry

Quality Gold Plans to Go Public Through a SPAC


Jewelry wholesaler Quality Gold plans to go public through a merger with a SPAC (special purpose acquisition company) in the first quarter of 2023.

After combining with Tastemaker Acquisition Corp., Quality Gold hopes to be listed on Nasdaq under the ticker QGLD. The initial public offering (IPO) aims to raise $279 million, which would imply an enterprise value for Quality Gold of $989 million, just shy of “unicorn” status.

Based in Fairfield, Ohio, Quality Gold will continue to be led by CEO Michael Langhammer; Michael’s brother, chief operating officer Jason Langhammer; and its current senior management.

Founded in 1979 by their father, David, Quality Gold 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).

Quality Gold hopes to use the IPO funds for mergers and acquisitions, such as its purchase of IBGoodman in June. Quality Gold has acquired 12 companies since 2012, including Leslie’s, Star Ring, and Wideband.

“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.”

He said the company is “highly selective in our purchases.… Many of [our] targets have been family owned without a transition plan, many times we are the only suitor.”

The two brothers are “not cashing out,” Langhammer added. “We will continue to own a large portion of the stock. We want to grow, want to double, and then double again.”

According to its statement, existing Quality Gold equity holders will retain over 90% of the combined company’s equity.

Michael Langhammer
Quality Gold CEO Michael Langhammer will stay with the company.

Langhammer noted the jewelry industry remains “fragmented” with “no dominant player” but called its primary competitors Stuller and Richline Group.

He said that Quality Gold is a leader in the gold and silver space, and has a strong position in lab-grown diamonds, which now comprise 16% of its sales.

The company sells mostly unbranded jewelry, he said, but has over 30 active trade brands. It has more than 15,000 customers, the majority of which are independent jewelers. It hopes to increase sales to mass merchandisers and e-tailers.

He said that Quality Gold has consistently outperformed the larger industry and the U.S. gross domestic product.

“We believe that our COVID boost will be permanent,” Langhammer said. “We are way above 2019 levels and aren’t going back.”

Quality Gold has set up an investor relations website that includes an investor presentation. Its prospectus, filed Oct. 20 with the Securities and Exchange Commission, can be seen here.

Photo courtesy of Quality Gold

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By: Rob Bates

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