Essilor to Acquire Coastal.com
Essilor expands in online distribution with the acquisition of Canadian retailer Coastal.com Essilor International has entered into a binding agreement to acquire all of the outstanding common stock of the Vancouver-based company Coastal Contacts (Coastal.com), one of the world's leading online vision care retailers. The transaction is expected to be completed by the end of April 2014. Coastal.com is listed on the Toronto Stock Exchange and on NASDAQ and reported revenue of CAD 218 million for the fiscal year ended October 31, 2013. Founded in 2000, the company designs and distributes one of the widest online selections of optical equipment, including contact lenses, prescription and non-prescription eyeglasses, sunglasses and various accessories. Products are sold through several local websites covering mainly North America and Europe as well as the Asia-Pacific region and Brazil. The company has more than five million customers worldwide. Commenting on the acquisition, Hubert Sagnières, Essilor's Chairman and CEO, said: "The Internet has an important role to play in helping us to fulfill our corporate mission of enabling people to enjoy a better life through better sight. In our industry, as in many others, the purchasing process is becoming more diversified. With Coastal.com, Essilor is acquiring a recognized online vision care platform." Roger Hardy, Chairman and CEO of Coastal.com, said: "The Board of Directors of Coastal.com unanimously recommend that shareholders accept Essilor's offer. As a member of the world's leading vision care group, we will be able to offer our customers even better service. Combining Coastal.com's expertise in online sales with Essilor's innovation, marketing and logistics capabilities will allow us to focus our offer more effectively on the various categories of consumers." Online sales account for roughly 4% of the global vision care market, which is estimated at some USD 100 billion based on retail prices. They are likely to continue growing at a double-digit rate for the foreseeable future. Essilor has been involved in online distribution for several years through its subsidiaries FramesDirect and EyeBuyDirect and through MyOnlineOptical, a turnkey e-commerce engine that enables American eyecare professionals to offer an online complement to their in-store offerings. Essilor is offering CAD 12.45 per Coastal.com share, which represents a premium of approximately 20% to the closing share price of CAD 10.39 per share on February 26, 2014 and approximately 42% to the weighted average price of CAD 8.74 quoted on the Toronto Stock Exchange over the last 60 trading days. The transaction represents a net equity value of approximately CAD 430 million. The transaction will be structured as an arrangement under the Canada Business Corporations Act and is subject among others to the approval of the Competition Bureau in Canada and to that of Coastal.com's shareholders. Roger Hardy, founder, Chairman and CEO, along with Coastal.com's directors and officers, have entered into support and voting agreements pursuant to which they have agreed to vote their shares of Coastal.com, representing 16% of all outstanding shares, in favor of the transaction.
