Essilor International is eyeing a rapid expansion into developing markets over the next few years and the recently approved $430-million friendly takeover of Canada’s Coastal.com will help it reach that objective, says the head of the company’s North American operations.
France-based Essilor, the world’s largest maker of prescription eyewear, estimates that almost half of the world’s population in need of vision correction — or about 2.5 billion people — do not have access to contact lenses or glasses.
And that’s why it anticipates the most growth for the company will be in countries like China, Brazil, India and Indonesia, where there is strong demand but not necessarily availability.
“Amazingly, it’s not just about the affordability. The key is just getting it to them,” John Carrier, president and CEO of Essilor of America, said from Vancouver on Tuesday.
“It’s a complicated, customized product. To bring it to rural places in India and in some other parts of the world, it’s actually complicated. We think that e-commerce technologies is the a good way to speed up … access to more people around the world.”
Taking into account the potential to move into these countries was one of the reasons behind the acquisition of Vancouver-based, Coastal, best known for running Canada’s largest online optical store, Clearly Contacts, he said.
The merger, billed by the two companies as the largest in Canadian e-commerce history, cleared its last regulatory hurdle last week when it was green-lighted by the federal Competition Bureau. The board of directors at Coastal had already unanimously supported Essilor’s offer, with the deal expected to close May 1.
Carrier said Essilor had been looking to grow its online presence for the last five years, with the acquisition of two smaller e-commerce companies, U.S.-based Frames Direct and EyeBuyDirect, which operates mainly in China. But the purchase of Coastal came together quickly after talks began last fall.
In late February, Essilor offered $12.45 per share in cash for each share of Coastal, a 43 per cent premium over the company’s three-month, volume-weighted average price of $8.73 prior to the announcement.
“It’s a larger international multiproduct platform in the sense that they have a presence in multiple countries already and it is our intention to grow it globally,” said Carrier.
In the last year, Coastal has been rapidly expanding its sales of prescription eyeglasses and sunglasses in addition to contact lenses, and even placed its bets on traditional bricks-and-mortar stores with a handful of physical storefronts in Vancouver and Toronto. It had expected to open at least 10 other locations across the country by the end of next year, but Essilor said those plans have been put on hold.
Carrier also said that as yet there are no plans to introduce Essilor’s line of eyeglasses and contact lenses to Clearly Contacts, which will keep its own brand.
Coastal Contacts Inc. is an online direct-to-consumer retailer of contact lenses, eyeglasses, sunglasses and vision care accessories serving more than 10 markets around the world, including Canada, the United States, Sweden, Norway and Japan.
Essilor International SA is an ophthalmic optics company whose brands include Varilux, Crizal, Kodak and Foster Grant among others. It also develops and sells equipment for prescription laboratories as well as instruments and services designed for optical professionals.