WellPoint has inked an agreement to sell 1-800-CONTACTS to Thomas H. Lee Partners. Also, Wellpoint has agreed to sell the assets of Glasses.com and its virtual try-on technology to Luxottica. No financial terms were disclosed for either transaction, both of which are expected to close in the first quarter of 2014.
INDIANAPOLIS–(BUSINESS WIRE)–Jan. 7, 2014– WellPoint (NYSE: WLP) today announced it has signed a definitive agreement to sell its online contact lens retail subsidiary 1-800 CONTACTS to private equity firm Thomas H. Lee Partners. Additionally, the company has entered into an asset-purchase agreement for glasses.com and its virtual try-on technology with Luxottica, a leader in the design, manufacture, distribution and sale of fashion, luxury and sports eyewear. Each agreement is subject to customary closing conditions and each transaction is expected to close in the first quarter of 2014.
“1-800 CONTACTS has strong brand recognition and a leading direct-to-consumer model. However, as we prepare for the coming changes to the health care system, we are focused on our core growth opportunities across both our commercial and government business segments. Proceeds from this transaction will support our continued capital deployment strategies,” said Joseph R. Swedish, chief executive officer of WellPoint.
Financial terms of the transaction were not disclosed. In connection with the sale agreements, WellPoint expects to record an impairment charge in the range of $0.52 to $0.57 per share in the fourth quarter of 2013. As a result, WellPoint now expects GAAP net income of at least $7.88 per share for the full year 2013. Excluding the charge, WellPoint continues to expect adjusted net income of at least $8.40 per share for the full year 2013. This guidance includes no investment gains or losses beyond those recorded during the first nine months of 2013 (refer to GAAP Reconciliation table).
WellPoint, Inc. has referenced “Adjusted Net Income Per Share,” a non-GAAP measure, in this document. This non-GAAP measure is not intended to be an alternative to any measure calculated in accordance with GAAP. Rather, this non-GAAP measure is intended to aid investors when comparing WellPoint, Inc.’s financial results among periods. A reconciliation of this measure to the most directly comparable measure calculated in accordance with GAAP is presented below.
Full Year 2013
Net income per diluted share At least $7.88
Add / (Subtract) – net of related tax effects:
Net realized gains on investments through first nine months of 2013 (0.36 )
Other-than-temporary impairment losses on investments through first nine months of 2013 0.16
Loss on extinguishment of debt 0.31
Tax benefit from favorable tax election (0.21 )
Acquisition and integration related costs 0.05
Impairment charge in connection with 1-800 CONTACTS sales agreements 0.52 – 0.57
Net adjustment items 0.47 – 0.52
Adjusted net income per diluted share At least $8.40
About Thomas H. Lee Partners
Thomas H. Lee Partners, L.P. (“THL”) is one of the world’s oldest and most experienced private equity firms. The firm invests in growth-oriented global businesses, headquartered principally in North America, across three broad sectors: Consumer & Healthcare, Media & Information Services and Business & Financial Services. THL’s team of investment and operating professionals partner with portfolio company management teams to identify and implement business process improvements that accelerate sustainable revenue and profit growth. Since its founding in 1974, THL has raised approximately $20 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $150 billion. THL strives to build great companies of lasting value and generate superior investment returns. For more information, please visit www.thl.com.
Luxottica Group is a leader in premium, luxury and sports eyewear with approximately 7,000 optical and sun retail stores in North America, Asia-Pacific, China, South Africa, Latin America and Europe, and a strong, well-balanced brand portfolio. Proprietary brands include Ray-Ban, the world’s most famous sun eyewear brand, Oakley, Vogue-Eyewear, Persol, Oliver Peoples, Alain Mikli and Arnette, while licensed brands include Giorgio Armani, Bulgari, Burberry, Chanel, Coach, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Starck Eyes, Tiffany and Versace. In addition to a global wholesale network involving 130 different countries, the Group manages leading retail chains in major markets, including LensCrafters, Pearle Vision and ILORI in North America, OPSM and Laubman & Pank in Asia-Pacific, LensCrafters in China, GMO in Latin America and Sunglass Hut worldwide. The Group’s products are designed and manufactured at its six manufacturing plants in Italy, two wholly owned plants in the People’s Republic of China, one plant in Brazil and one plant in the United States devoted to the production of sports eyewear. In 2012, Luxottica Group posted net sales of more than Euro 7.0 billion.
About WellPoint, Inc.
WellPoint is one of the nation’s leading health benefits companies. We believe that our health connects us all. So we focus on being a valued health partner and delivering quality products and services that give members access to the care they need. With more than 67 million people served by our affiliated companies including approximately 36 million enrolled in our family of health plans, we can make a real difference to meet the needs of our diverse customers. We’re an independent licensee of the Blue Cross and Blue Shield Association. We serve members as the Blue Cross licensee for California; and as the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In most of these service areas, our plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). We also serve customers in other states through our Amerigroup and CareMore subsidiaries. To find out more about us, go to wellpoint.com.