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BATH, England and NUREMBERG, Germany—Inspecs Group PLC (LSE: SPEC), a leading designer, manufacturer and distributor of eyewear frames, announced that it has conditionally agreed to acquire all of the equity interests in Eschenbach Holding GmbH for €94.85 million (approximately £84.7 million). The consideration will be paid wholly in cash on closing. Eschenbach is a leading, global, eyewear supplier headquartered in Nuremberg, Germany. It has two divisions, one focused on designing and distributing eyeglass frames and sunglasses (which consists of Tura in the U.S.) and one on designing, manufacturing and distributing specialty optics products and low vision technologies, which is the Optics Division (Eschenbach Optik of America). 

Inspecs Group said the acquisition represents a key strategic step in the company’s growth as a global, vertically integrated, eyewear firm. Eschenbach’s established presence in the U.S. and continental Europe (in particular Germany and France) alongside its portfolio of more than 15 "in house" and licensed brands are complementary to Inspecs and will help position Inspecs Group as one of the leading eyewear companies in the world, it said.

In a separate announcement, funds advised by Equistone Partners Europe stated they have agreed to sell their majority stake in Eschenbach Holding GmbH in the deal. Barclays Private Equity, the predecessor organization of Equistone, acquired Eschenbach from the founding family and a financial investor in July 2007, together with the company’s management team.

Since then, Eschenbach’s turnover has increased from an initial €100 million to €143 million in 2019. The strategic sale of its technical optics division in 2014 and the important acquisitions of British eyewear business International Eyewear Limited (2008) and U.S.-based eyewear brand Tura (2009) also fall within this ownership period.

Inspecs's announcement said that the acquisition and associated costs will be funded by way of a conditional placing to raise gross proceeds of £64 million to be announced separately later today, along with $8 million (approximately £6.0 million) drawn down from the company’s existing bank facility and a further $10 million (approximately £7.5 million) under an accordion facility, as well as approximately $15 million (approximately £11.3 million) in cash reserves.

The Inspecs board of directors said they believe that the acquisition will deliver on all of their strategic acquisition objectives (as set out at the time of the company’s IPO) while also being financially compelling for the company. They noted this includes the fact that the acquisition extends the company's presence internationally in key global markets, such as the U.S. and Germany, through a network of over 250 sales representatives and more than 12 international subsidiaries.


Robin Totterman


Inspecs' greater scale post-acquisition is expected to provide the opportunity for Inspecs to acquire bigger global licenses and the company, they said, will be able to utilize its manufacturing expertise in Asia to assist Eschenbach in providing cost synergies going forward.

Eschenbach's senior management team from both Germany and the U.S. will join Inspecs, the company said, "adding a wealth of experience to the leadership team and helping to mitigate risks arising from the integration process." It noted, the acquisition "presents opportunities to deliver innovative business models to broaden the company's routes to market and enhance its product offering, for example an online B2B platform, developing Eschenbach's insurance business in the U.S. and providing a complete frame and lens package through integration with the
Inspecs' Norville lens manufacturing facility.

For the financial year ended Dec. 31, 2019 Eschenbach generated audited revenues of €143.3 million (approximately $169.2 million) having grown revenue at a compound annual growth rate of 5.9 percent between 2017 and 2019. EBITDA (excluding leasing costs) was €10.3 million (approximately $12.2 million) in 2019 and the business was cash generative.

The acquisition is expected to be earnings accretive for Inspecs in the financial year ending Dec. 31, 2021.

Robin Totterman, Inspecs CEO, commented, “We are delighted to have agreed to acquire Eschenbach, Germany’s number one eyewear company which in turn owns one of the leading eyewear companies in the USA, Tura. As a high-quality business with a strong management team and track record of margin-accretive growth, Eschenbach represents the ideal fit for Inspecs.

"Moreover, it will enable the group to penetrate key global markets, broaden our customer reach, strengthen our brand portfolio and capitalize on the compelling structural opportunities that exist in the fragmented global eyewear market."

He continued, "By adding to the Group’s resilient, vertically integrated business model, this deal expands our global distribution network and brings over 250 salespeople into the Group, propelling Inspecs to a new high by creating one of the largest eyewear companies in the world. We look forward to welcoming the Eschenbach team and working together to build on Inspecs’ recent positive trading momentum while accelerating our long term growth and delivering value to our shareholders.”

Eschenbach's Eyewear Division generated approximately 78 percent of Eschenbach’s revenue in the year to Dec. 31, 2019, while the Optics Division generated approximately 22 percent of revenue. The Eyewear Division currently supplies frames for over 15 brands, including both "in house" and licensed brands. These brands are typically addressed to the "premium" eyewear market. Eschenbach has won awards for the design of its frames, including being a "German Design Award Winner" and "Red Dot Award Winner" in 2020.

In 2019, Eschenbach sold approximately 3.6 million frames.

The Optics Division produces vision technology (e.g. low vision aids) and consumer optics (e.g. binoculars), utilising the expertise of more than 70 in-house opticians. The division has a strong engineering pedigree and is a world leader in magnification.

Eschenbach has a global distribution network with distribution into over 80 countries. It is the number one supplier of prescription glasses in Germany and one of the leading independent eyewear distributors in the U.S.

Eschenbach's experienced senior management team (Dr. Jorg Zobel, CEO; Holger Maas, CFO; Matthias Anke, managing director of optics in Germany; Scott Senett, CEO of Tura; and Ken Bradley, CEO of the U.S. Optics Division) will join Inspecs following the acquisition and continue to lead the business from Nuremberg and New York, Inspecs' announcement said. The strength of their leadership, alongside continuity of management, will help mitigate risks arising through the integration process.

Inspecs was founded by Robin Totterman (CEO) in 1988 and is a designer, manufacturer and distributor of eyewear frames and lenses. The group went public in February of this year, as VMAIL previously reported. The company acquired Norville this past July. Inspecs' sales network covers over 80 countries and reaches approximately 30,000 points of sale. Inspecs has operations across the globe.

“The successes we achieved during our partnership as well as a very positive 2019 financial year and a new five-year growth strategy form an ideal basis for Eschenbach’s continued, successful development. Joining forces with Inspecs will provide Eschenbach with an additional boost of momentum to reliably strengthen its global market position and to write a new chapter of its success story,” said Dr. Marc Arens, managing director and partner at Equistone’s Munich office.

“During our successful partnership, Equistone has always proved to be a reliable and growth-oriented investor and partner for more than a decade,” said Dr Jorg Zobel, CEO of Eschenbach Optik. “Together with Equistone we found in Inspecs the right strategic partner for our new five-year growth vision. We have ambitious goals that we can achieve together in the new group. Our dedication to German engineering and quality and the best combination of design and function will remain key pillars.”

Stated Totterman, “We have followed Eschenbach’s progress for some time and are pleased to be welcoming Germany’s No.1 eyewear company and its great people into the Inspecs Group. Joining these two industry leading businesses together will create the sixth largest eyewear company in the world and enable the enlarged Group to further penetrate key global markets while also diversifying our combined customer and product portfolios. This is an exciting time for the industry and I look forward to working together. ”

Michael H. Bork, Dr. Marc Arens and Julia Luca led the transaction on behalf of Equistone. Equistone/Eschenbach was advised by Lincoln International (M&A), Ashurst (Legal), E&Y Parthenon (Strategy) and E&Y (Financial & Tax). INSPECS was advised by Livingstone (M&A), Gleiss Lutz (Legal) and KPMG (Financial & Tax).