Dec 16 2009
FGX International Holdings Limited (NASDAQ:FGXI) today announced
that it has signed a definitive agreement to merge with a subsidiary of
Essilor International of Charenton-le-Pont, France. Essilor
shares trade on the NYSE Euronext Paris market and are included in the
CAC 40 index.
Under the terms of the merger agreement, which was unanimously approved
by the Boards of Directors of both companies, FGX International
shareholders will receive $19.75 per share in cash upon completion of
the merger, for an aggregate value of approximately $565 million,
including the assumption of FGX debt of approximately $100 million. If
completed, FGX International will become a wholly owned subsidiary of
Essilor.
Essilor International is the world leader in ophthalmic optical
products. Marketed under such brands as Varilux®, Crizal®, Essilor® and
Definity®, Essilor offers a wide range of lenses to correct myopia,
hyperopia, astigmatism and presbyopia. Essilor has approximately 35,000
employees with a presence in approximately 100 countries, including the
US. It operates through 15 production sites, 293 lens finishing
laboratories and local distribution networks. In 2008, Essilor had
revenues of approximately €3.1 billion.
FGX International is North America’s leading designer and marketer of
non-prescription reading glasses and popular priced sunglasses. FGX
brands include FosterGrant®, Magnivision®, Solar Shield®, Polar Eyes®,
Corinne McCormack®, Angel™, Anarchy®, and Gargoyles®. FGX also holds
licenses to sell optical products under the Ironman, Levi Strauss
Signature, C9 by Champion and Body Glove brands. FGX International
products are found in over 68,000 retail locations in the US, Canada,
Mexico and the United Kingdom. Revenues for 2008 were approximately $256
million (approximately $237 million, excluding the divested Jewelry
business).
Alec Taylor, CEO of FGX International commented “This proposed merger is
of major significance to FGX International. Essilor’s global reach will
be of considerable strategic value to market our products on a worldwide
basis and will greatly enhance our competitive position. Essilor’s
global footprint will allow us to expand our presence in Europe, Asia
and other parts of the world, while continuing to focus on growing our
North American sales in over-the-counter reading glasses and
popular-priced sunglasses. We also find the Essilor culture compelling
and a good fit with ours. We believe this transaction represents a
significant value for our shareholders.”
“This acquisition is in line with Essilor’s strategy of procuring the
resources needed to provide a quality offering that covers different
eyewear market segments around the world in order to meet a wide range
of needs. It also strengthens the company’s business base and enhances
its growth prospects,” said Hubert Sagnières, Essilor’s COO and CEO
designate. “Demand for non-prescription reading glasses is growing. In
addition, the market fits well with our prescription lens business and
is supported by favorable demographic trends. FGX will benefit from our
international distribution network while we will leverage FGX’s brands
and expertise to deploy this new offering around the world.”
FGX International will be a stand-alone business unit of Essilor. FGX’s
headquarters will remain in Rhode Island and it will also continue to
maintain offices in San Luis Obispo, CA; Toronto, Canada;
Stoke-on-Trent, England; New York, NY; Mexico City, Mexico; and
Shenzhen, China. Alec Taylor will remain Chief Executive Officer of FGX
International and FGX’s management team will be unchanged.
Key Elements of the Transaction:
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The transaction is subject to customary closing conditions, including
FGX International shareholder approval and applicable regulatory
clearances, and is expected to close in 2010.
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FGX’s principal shareholder, an affiliate of Berggruen Holdings, which
owns approximately 32% of FGX’s outstanding shares, and key members of
FGX’s senior management team have agreed to vote their shares in favor
of the transaction.
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Essilor will finance the transaction from its cash reserves and
existing committed credit facilities.
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The agreement includes a termination fee of approximately $18.3
million payable, in certain circumstances, by FGX International to
Essilor such as in the event a superior unsolicited offer is accepted
by FGX International.
After careful consideration the Board of Directors has determined that
the merger with Essilor is in the best interest of all of the
shareholders of FGX International and believes that it represents a
significant opportunity for FGX International and its employees for the
longer term. Accordingly, the Board of Directors unanimously recommends
that FGX International shareholders vote to approve the merger. Should
the board be presented with any other offer prior to the close of this
transaction, it has a fiduciary duty to consider such offer.
Source
FGX International Holdings Limited