NEW YORK — Italian eyewear bellwether Luxottica Group SpA announced the acquisition of Cole National on Monday, confirming rumors that had swirled since early October.
Luxottica said it was buying all outstanding Cole National shares at a purchase price of $22.50 each, which translates into a purchase price of about $401 million.
In a statement, Leonardo Del Vecchio, chairman of Luxottica, zeroed in on the two major factors that drove the company to initiate unsolicited offers as far back as July. Del Vecchio said the company had been “keen observers of [Cole’s] business turnaround” and believed the acquisition would beef up its North American presence, currently represented by the LensCrafters and Sunglass Hut International nameplates.
Bringing Cole into the fold gives Luxottica an additional 2,197 units across North America, including the already established Pearle Vision stores. Cole also operates one of the largest managed vision care benefit programs, as well as Things Remembered, a 728-location mall-based personalized gift business.
Significant reduction in losses and rising sales in Cole’s most recent quarter also undoubtedly spurred Luxottica’s decision. For the third quarter ended Nov. 1, Cole reported a loss of $1.1 million, or 7 cents a diluted share, compared with a loss of $1.9 million, or 12 cents a share, the previous year.
Sales for the quarter jumped 7.6 percent to $296.5 million from $275.5 million.
As reported, rumors of Luxottica’s interest in Cole began surfacing in the European press in early October. At the time, Luxottica declined to comment on whether the company was the unnamed firm that made an unsolicited, nonbinding $320.9 million takeover offer.
Larry Pollock, Cole’s president and chief executive officer, shed some light on the time line of events during a conference call on Monday, saying the deal was the “culmination of a process that began in July 2003.” At that time, said Pollock, Luxottica made an unsolicited offer of $19.65 a share.
After attaining stockholder and regulatory approval, both parties expect the deal to close in the second half of this year.