NEW YORK—In 2010, the Top 5 Supplier-Owned Lab Networks have continued to expand their market share through mergers and acquisitions as well as by upgrading existing labs with high performance lens coating capabilities, digital surfacing systems and proprietary products. However, the independent wholesale labs that were acquisition targets in 2010 are smaller those than in previous years.
Unlike large independents such as Pech Optical, which was acquired by Essilor in 2009 and had $37 million in annual revenue or Interstate Optical, acquired by Essilor in 2008, with $24.9 million annual revenue, the independents acquired this year all reported earnings of less than $7.0 million. This may be due to the weak economy or the fact that the number of large independent labs that are attractive acquisition targets is shrinking.
M&A activity kicked off in January, when Essilor announced that it bought a majority or total interest in three labs: Ultimate Optical in Florida, with $6.3 million in annual revenue, Optical Dimensions in Michigan, with $3.7 million in annual revenue, Truckee Meadows Optical in Nevada, with $3 million in annual revenue.
Also in January, Carl Zeiss Vision announced a joint venture with Marcella Optical that resulted in the Cedar Rapids, Iowa lab joining Zeiss’ lab network.
In March, VSP Labs announced the launch of Unity Performance Coatings, an in-house line of anti-reflective coatings. The line, consisting of Unity, Unity Plus and Unity Elite, is available exclusively through VSP’s wholly-owned laboratories.
The following month, Essilor acquired Hawkins Optical, a Topeka, Kansas-based prescription laboratory with $4.5 million in revenue. Hawkins Optical then relocated to Duffens Optical, a Topeka laboratory that is part of the Essilor Laboratories of America network.
This summer, Essilor announced that it had acquired a stake in Epic Labs in Minnesota ($3 million in revenue) and also acquired the assets of Custom Optical in Georgia ($2.5 million in revenue). Additionally, Nikon Optical U.S., a Nikon-Essilor subsidiary, acquired a majority interest in Colorado-based Pasch Optical Laboratory, which generates $3.9 million in revenue. Essilor also acquired a majority stake in Louisiana-based Gulf States Optical, which generates $3 million in revenue.
In August, Hoya Vision Care, North America expanded its lab network with opening of a new facility in Salina, Kansas. In September, VSP Optics Group, as part of VSP Global, acquired Capitol Optical, a full-service optical laboratory located in Olympia, Wash. The purchase price was not disclosed. Capitol Optical processes an average of 300 prescriptions daily, and has 24 employees, according to a VSP spokesperson, who noted that VSP expects to increase the size of the lab’s work force in the near future.