Coastal stockholders will receive C$12.45 a share in cash, Charenton-le-Pont, France-based Essilor said today. That’s 20 percent more than yesterday’s closing price in Toronto Stock Exchange trading. Coastal rose above the offer price, indicating some investors expect a higher bid.
Buying Vancouver-based Coastal will give Essilor another 5 million customers, the companies said. Coastal operates sites including Coastal.com that sell contact lenses and glasses in Canada, the U.S., Sweden, Norway and elsewhere. Online sales account for about 4 percent of the global vision-care market, and will grow at a double-digit rate for the foreseeable future, Essilor said.
“Whilst Essilor has had a presence in online retail for some time with Framesdirect.com, this represents a significant step up in the channel and interestingly coincides with a demand from some markets for a stronger online sales channel,” Alexander Kleban, an analyst at Barclays Plc in London, said in a report to clients.
Roger Hardy, Coastal’s chairman, chief executive officer and founder, owns 10.7 percent of the company’s shares, according to data compiled by Bloomberg. He and other officers and directors, holding 16 percent of outstanding stock, agreed to vote their shares in favor of the deal, Coastal said in a statement.
Coastal rose 20 percent to C$12.49 at the close in Toronto. If Coastal receives a higher offer, Essilor has the right to match it or receive a termination fee of C$16 million, Coastal said.
An independent committee of Coastal’s board recommended the deal, which was approved unanimously by the full board, Coastal said.
Guggenheim Securities LLC is lead financial adviser to Coastal, Roth Capital Partners is co-financial adviser and McCarthy Tetrault LLP provided legal advice, the company said. Essilor doesn’t disclose its financial advisers, a company spokeswoman said.
BMO Capital Markets provided financial advice to the independent committee and Blake, Cassels & Graydon LLP is the committee’s legal adviser.
Net income in 2013 rose 1.6 percent to 593 million euros ($809.8 million), Essilor said in a separate statement today. Analysts predicted 608 million euros, the average of 17 estimates compiled by Bloomberg.
Essilor fell 3.2 percent to 76.33 euros in Paris, giving the company a market value of 16.4 billion euros.
Almost half of Coastal’s C$196.1 million in 2012 revenue came from Canada and the U.S. Coastal’s sales in the fiscal year ended Oct. 31 totaled C$218 million, Essilor said.
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