Latest News Luxottica to Acquire Glasses.com WellPoint to Divest 1-800 CONTACTS By Staff Tuesday, January 07, 2014 4:09 PM MILAN, Italy and INDIANAPOLIS, Ind.— Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), announced it has entered into an asset purchase agreement to acquire Glasses.com from WellPoint Inc. (NYSE: WLP). “Today we are announcing the agreement to acquire a technology which we believe will benefit the overall eyewear sector and the optical industry in North America, a crucial market for our group and one we remain strongly committed to,” said Andrea Guerra, CEO of Luxottica. The company’s statement added that Luxottica “will invest in innovations to create an enhanced online experience that will be accessible to independent practitioners in North America.” Stated Guerra, “This acquisition will function as a starting point to shape an independent, digital platform through which the North American market can and will access the unique domain, innovating the shopping experience and improving the quality of products and services available to consumers.” Concurrent but separate from Luxottica’s announcement, WellPoint, one of the nation's largest health benefits companies, announced late today that it will divest itself of 1-800 CONTACTS.Glasses.com has been operated as a division of 1-800. WellPoint has signed a definitive agreement to sell its online contact lens retail subsidiary 1-800 CONTACTS to private equity firm Thomas H. Lee Partners. The purchase price and financial terms of both transactions were undisclosed but are subject to customary closing conditions, the companies said, adding each transaction is expected to close in the first quarter of 2014. The acquisition of glasses.com will not have a material impact on Luxottica's consolidated financial statement, Luxottica said. Said WellPoint CEO Joseph R. Swedish, "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." WellPoint purchased 1-800 CONTACTS and its Glasses.com business in June 2012 from Fenway Partners, as previously reported by VMail. Glasses.com launched its virtual try on app last spring. Luxottica’s statement pointed out, “The eyewear industry in North America is estimated today to be a $35.5 billion market with the opportunity to grow to $44 billion to $47 billion by 2020, according to Vision Council and company estimates. Demographic factors, such as an increase in the number of individuals needing vision correction products, the projected increase in eye exams each year, and the greater penetration of premium eyewear are all expected to drive continued growth. “Luxottica believes that the investment in technology and the development of an accessible digital platform for the North American trade are crucial next steps in developing the market to its full potential. By investing in online innovation and providing accessibility to independent practitioners, Luxottica can offer both the doctor and the consumer a unique seamlessly integrated, superior experience,” the company’s statement added. WellPoint serves health care benefits members in 14 states as an independent licensee of the Blue Cross and Blue Shield Association, and customers in other states through its Amerigroup and CareMore subsidiaries. Glasses.com’s proprietary virtual try-on technology uses a three-dimensional image of the consumer’s face and enables the customer to see the frame in detail from multiple angles. It also allows customers to send frame options to friends and family for their input and opinion, leveraging social media tools. Use of the technology is available direct to customers via free iPhone and iPad apps.