Highmark Health Confirms Reports It Is Exploring Strategic Options for Visionworks and Davis Businesses

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PITTSBURGH—Confirming a report posted by the Wall Street Journal, a spokesperson for Highmark Health, one of the largest integrated health care delivery and financing networks in the country, a major Blue Cross Blue Shield insurer, confirmed to VMail that the company is exploring options which could result in the sale of its HVHC vision business, which consists of Visionworks, the national optical retailer, and Davis Vision, the third-largest managed vision care player in the U.S. A sale, if it should occur, could dramatically change the dynamics of the U.S. vision care market.



The integrated businesses’ performance was a bright spot for Highmark in 2015 when the company reported its most recent financial results earlier this year. HVHC delivered revenues of $1.5 billion and an operating gain of $122 million. Visionworks, which operated 700 retail stores in 42 states in 2015, added 56 new stores last year in key metro markets such as Detroit, Michigan and the Boroughs of NYC and realized a 5.3 percent increase in comparable store retail sales. Davis Vision, the managed care component of HVHC, increased insurance enrollment by 1.9 million, putting it on track to provide coverage to more than 22 million members in 2016, the company said.

2015 was the second full year Visionworks operated nationally as a unified retail optical brand. Visionworks and Davis are based in San Antonio, Texas. In Vision Monday’s most recent report on the Top 50 U.S. Optical Retailers, Visionworks was ranked number six.



Company executives wouldn’t comment directly, but the WSJ posted that Highmark is reportedly working with merger-advisory firm CapM, an independent mergers and acquisitions advisory firm, which has been in contact with potential strategic and private equity buyers.

The Highmark spokesperson told VMail, “HVHC is one of the most successful businesses in the vision care space, one which was built ‘from scratch’ over the years. It is truly a strategic investment of the organization. We are regularly contacted by people interested in this non-core business of ours and we always keep our options open.”

The spokesperson added, “Highmark is a financially strong organization, with $6 billion in investment assets in our strategic portfolio and solid financial ratings from Moody’s, Standard & Poor’s and AM Best.

Highmark operates large Blue Cross Blue Shield insurance plans in Pennsylvania, West Virginia and Delaware. The company had a loss last year of $85 million on revenue of $17.7 billion. As VMail reported last month, Highmark sued the U.S. government over the Affordable Care Act (ACA), arguing that it was owed substantial sums for its participation in the ACA’s state and federal exchanges, with the understanding that the federal government would honor statutory, regulatory and contractual obligations under what’s known as the “risk corridor” program.