WellPoint Acquires 1-800 Contacts From Fenway Partners For Up To US$900 Million

Published: Jun 04 2012
Deal Summary

WellPoint, Inc., a provider of health benefits program, completed the acquisition of 1-800 Contacts, Inc., a contact lens store operator, from Fenway Partners, Inc., a private equity firm, for a purchase consideration of approximately $900m. WellPoint financed the acquisition from available cash on hand. Following the acquisition, 1-800 Contacts became a wholly owned operating division of WellPoint, and will remain headquartered in Draper, Utah.

This acquisition enables WellPoint to enter and expand its business operations in eyewear market.

Angela F. Braly, president and CEO of WellPoint, said, “We are extremely pleased to finalize our agreement even sooner than anticipated. 1-800 Contacts is an extraordinary company and we look forward to working together to deliver greater value to consumers and convenient access to care. WellPoint and 1-800 Contacts have complementary capabilities and assets, and we can now focus on leveraging 1-800 Contacts’ industry-leading platform to help grow direct-to-consumer relationships across the country and further supplement and expand our vision business.”

Jonathan Coon, CEO and co-founder of 1-800 Contacts, said, “We are excited to be a part of not only one of the largest health benefits providers in the country, but also the most customer-focused. We look forward to joining WellPoint to serve the eyewear needs of our mutual customers. Our companies share common goals of providing consumers with the highest level of service and making the experience as simple as possible.”

Peter Lamm, co-founder and managing partner of Fenway Partners, said, “We are very pleased with the outcome of our investment in 1-800 Contacts. Fenway has a long track record of successfully investing in and building branded consumer products companies, including Easton-Bell Sports and American Achievement as well as a prior successful investment in the luxury brand, Harry Winston. Fenway's experience with 1-800 Contacts is an instructive example of private equity partnering with management to create a better business – growing revenues, increasing domestic employment and payrolls, improving the customer value proposition and making significant investments in the future. We are delighted to have made such a positive impact on this company and that our Fenway Partners Fund investors will realize an attractive rate of return and an impressive multiple of capital.”

On December 31, 2007, Fenway Partners acquired 1-800 Contacts, for a purchase consideration of $340m.

Sonenshine Partners LLC acted as financial advisor, while Ropes & Gray LLP acted as legal advisor to Fenway Partners for the transaction.

Deal history

Completed: On June 20, 2012, WellPoint completed the acquisition of 1-800 Contacts from Fenway Partners, for a purchase consideration of approximately $900m.

Announced: On June 4, 2012, WellPoint agreed to acquire 1-800 Contacts from Fenway Partners, for a purchase consideration of approximately $900m.

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