Catterton closing in on jeweler John Hardy

Target: John Hardy

Value: $100 million to $120 million

Sponsor: Catterton Partners

Seller: 3i Group plc, company executives

John Hardy, a rival of jewelers in the United States such as David Yurman, sells Asia-themed wares such $225 silver dragon earrings as well as men’s jewelry, a fast-growing market, with beads and sailing cord bracelets.

The company is headquartered in Hong Kong, its products are designed in Bali but the bulk of revenue is generated in the United States, Canada and the Caribbean.

John Hardy’s enterprise value could range between $100 million and $120 million, one source told sister news service Reuters, adding that the deal would see the buyer paying back a $45 million redeemable loan to private equity firm 3i Group plc, which owns a 23 percent stake.

“Catterton have been holding exclusive talks with John Hardy for more than a month and a deal could be announced any time soon,” one source close to the matter said. A separate source confirmed the transaction could be concluded soon.

Chief Executive Damien Dernoncourt, who took the business private in 2007 with backing from 3i, controls it through a holding that includes other investors and creative director Guy Bedarida and owns 73 percent.

The branded jewelry sector is attracting strong investor interest because it is one of the fastest growing sub-segments of the global luxury industry, with jewels regarded as accessories in the overcrowded handbag market and buoyant demand coming from wealthy women in both mature and emerging markets.

Broker Bernstein forecast a 10 percent cumulative average growth rate for the jewelry market between 2013 and 2018 versus 6 percent for the personal luxury market overall.

“We anticipate that the bulk (around 70 percent) of the new aspirational customers into the market will be from emerging markets, many of whom will be attracted to jewelry as their first product purchased within luxury goods,” Bernstein said.

The jewelry sector has seen a number of high-profile deals in recent years with Swatch’s $750 million purchase of Harry Winston and Gucci-owner Kering’s acquisition of a majority stake in China’s Qeelin and Italy’s Pomellato.

Catterton declined to comment and no one was available for comment at John Hardy.

Astrid Wendlandt and and Olivia Oran are correspondents for Reuters in Paris and New York, respectively.