Essilor Finalizes Acquisition of Transitions Optical

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CHARENTON-LE-PONT, France— Essilor International (Reuters: ESSI.PA) announced today that it has finalized the acquisition of PPG Industries’ (NYSE:PPG) 51 percent ownership stake in Transitions Optical, the leading provider of photochromic lenses to ophthalmic lens manufacturers, and 100 percent of the capital of Intercast, a manufacturer of premium sunlenses.

Essilor International had held a 49 percent interest in the Transitions Optical joint venture.

The value of the transaction, one of the largest in the optical industry in recent years, amounts to $1.73 billion at closing, subject to customary post-closing adjustments, plus a deferred payment of $125 million over five years, according to Essilor.

In 2013, the Transitions Optical joint venture and sunlens business had combined net sales of $874 million, PPG said in a statement released today.

The transaction, which VMail first reported on July 29, 2013, was approved without conditions by competition authorities in Australia, Brazil, Germany, New Zealand, Portugal, Spain, the U.K. and the U.S.

Founded in 1990 and based in Pinellas Park, Fla., Transitions Optical reported sales of $844 million in 2013, of which $279 million with lens manufacturers other than Essilor.

“The acquisition of Transitions is a significant and highly promising transaction for Essilor,” commented Hubert Sagnieres, chairman and CEO 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.”

Transitions Optical and Intercast will be fully consolidated in Essilor’s financial statements as from April 1, 2014.

According to Essilor’s estimates, the integration of Transitions Optical will have a positive impact on Essilor’s financial indicators, notably with:

• An increase in the Group’s contribution margin1 of around 150 bps as from year two of the integration.
• An accretive effect on earnings per share as from 2014, representing at least 5 percent a year in subsequent years.
• A positive impact of around 50 bps on the Group’s like-for-like growth in consolidated revenue as from year three of the integration.