Coastal Contacts Inc. (TSX:COA; Nasdaq:COA) announced April 16 that shareholders have approved Essilor International’s bid to buy the company for $12.45 per share or about $430 million.
The French optical firm had made its all-cash offer on February 27, when the bid was a 20% premium on Coastal’s previous $10.39 closing price.
The pact still requires court approval, approval under the Competition Act and the satisfaction or waiver of other conditions.
Coastal’s board had unanimously endorsed the transaction.
The company, which operates in Canada as Clearly Contacts and in Europe as Lensway, is expected to keep CEO and founder Roger Hardy in place for as long as he’s needed.
Along with family members, Hardy owns 20% of the company, he told Business in Vancouver.
Hardy added that he expects Essilor to move its web development team from Austin, Texas, to Vancouver and to keep Coastal’s current executive team in place, including president Gary Collins.
“They approached us,” Hardy said. “We just had our heads down helping customers. The offer didn't start at $430 million. It moved back and forth a couple times as they looked at the value of the company and were trying to understand it.”
Essilor designs and makes a wide range of contact lenses, but Hardy said its target customer tends to be eye doctors rather than consumers directly.
“The opportunity will be for us to take our great success serving customers direct and think about how this whole eye-care model is going to evolve and really see if there's a way to help eye doctors get a little more competitive with their service offerings,” said Hardy, who worked in sales at Loomis Courier Service and at a contact lens manufacturer in the late 1990s before he founded what became Coastal Contacts.
The $430 million purchase is the highest price paid both for a Canadian online retailer and for a Canadian optical company. It also underscores the potential for other Vancouver-based online retailers to be acquisition targets.
Online suit-seller Indochino last year moved into an expanded Vancouver office, where more than 40 employees work. Its annual revenue is in the tens of millions of dollars, and the company has the capital to expand given its deep-pocketed ownership group, which includes Vancouver Whitecaps co-owners Jeff Mallett and Steve Nash.
“BuildDirect is also in a good position on its own,” added Hardy, who sits on the board of directors of that online building products retailer.
Then there's online shoe-seller ShoeMe.ca, which launched sales in mid-2012, and already has millions of dollars in annual revenue and a triple-digit-percentage growth rate, owner and founder Sean Clark told BIV.
Clark launched and expanded Coastal’s Australian division for several years before he returned to Vancouver in 2011.
He managed to attract startup capital from various Coastal executives who all liked his idea to sell shoes online.
“Eighteen months ago, it was me in a basement suite in Dunbar,” Clark said. “Now we have 20 employees, including four in our Toronto office and 16 here. We're continually hiring.”
