Essilor International has continued its strategy for growth, announcing that the company has finalised the acquisition of PPG Industries’ 51 per cent ownership stake in Transitions Optical and 100 per cent of the capital of Intercast, a manufacturer of premium sun lenses.
The transaction, announced last year in July was approved without conditions by competition authorities in Australia, Brazil, Germany, New Zealand, Portugal, Spain, the United Kingdom and the United States.Transitions Optical was founded in 1990 and is based in Florida. In 2013 the company reported sales of US$844 million, of which $279 million was with lens manufacturers other than Essilor.
“The acquisition of Transitions is a significant and highly promising transaction for Essilor,” commented Hubert Sagnières, Chairman and Chief Executive Officer of Essilor.
“We will give Transitions the resources it needs to speed its growth and allow the Group to broaden its expansion in photochromic lenses, both worldwide and in different market segments.”
the company has finalised the acquisition of PPG Industries’ 51 per cent ownership stake in Transitions Optical
Dave Cole, President of Transitions Optical, said the acquisition by Essilor will be positive for the company. “Since the founding of our business 23 years ago, our parent companies have been key to Transitions Optical’s success. We appreciate PPG’s long investment in and collaboration with our organsation. We look forward to a continued strong relationship with PPG as they will be providing ongoing research and development services and optical dyes to Transitions Optical under multi-year agreements with Essilor.”
“Essilor has been a collaborative partner with us from the beginning, and this transaction is a continuation and enhancement of a relationship that has brought value to us and to our industry. There are tremendous opportunities to boost expansion of photochromic products, particularly in fast-growing markets.”
Mr. Cole said the Transitions Optical leadership team will continue to run the business as usual. “We will continue to focus on strengthening our mutually beneficial relationships with all of our valued customers across the optical industry; leveraging the talents of our passionate, talented people; and providing the highest quality photochromic lenses to consumers.”
According to Essilor, the integration of Transitions Optical will positively impact Essilor’s financial indicators, with:
- An increase in the Group’s contribution margin of around 150 basis points (bps)
from year two of the integration
- Natural growth in earnings per share, representing at least 5 per cent a year
- A positive impact of around 50 bps on the Group’s like-for-like growth in consolidated revenue from year three of the integration.
The consideration for the transaction amounts to $1.73 billion at closing, subject to customary post-closing adjustments, plus a deferred payment of $125 million over five years.Transitions Optical and Intercast were fully consolidated into Essilor’s financial statements from 1 April 2014.