National Vision exploring sale that could value fourth-largest US retailer of eyeglasses, contact lenses at around US$1B; company operates more than 700 retail locations in 43 states

Cindy Allen

October 30, 2013 (Thomson Reuters Corp.) – National Vision Inc is exploring a sale that could value the fourth largest retailer of eyeglasses and contact lenses in the United States at around $1 billion, three people familiar with the matter said this week.

The Lawrenceville, Georgia-based company, which is owned by private equity firm Berkshire Partners LLC, is working with Barclays Plc on the sale process, the people said.

National Vision's earnings before interest, tax, depreciation and amortization are seen at between $90 million and $100 million, two of the people added.

The sources asked not to be identified because the sale process is not public. Berkshire Partners and Barclays declined to comment. National Vision did not respond to a request for comment.

National Vision, which focuses on low cost glasses and contacts, operates over 700 retail locations in 43 states under chains that include America's Best Contacts & Eyeglasses and Eyeglass World. It is the fourth biggest player in the U.S. optical market behind Luxottica Group Spa, Wal-Mart Stores Inc and Visionworks of America Inc.

Last year National Vision extended a partnership it had with Wal-Mart for five years which allows it to manage 227 stores within Wal-Mart, according to Standard & Poor's Rating Services Inc.

National Vision also has stores inside Fred Meyer Inc and military bases and sells its products online. The company employs over 6,000 people, according to its website.

Berkshire Partners took National Vision private in 2005 in a $190 million deal that was funded with $153 million in debt and included simultaneously acquiring Consolidated Vision Group Inc, another optical chain that was backed by private equity firm Kelso & Company, for $88 million.

In 2009 National Vision acquired EyeGlass World for an undisclosed amount. Any other equity investments that Berkshire Partners may have made in National Vision have also not been disclosed, yet the buyout firm has already got its investor's money back on its original 2005 investment in the company even before any sale.

This is because National Vision last year carried out a dividend recapitalization, borrowing $300 million to fund a $117 million dividend, according to Moody's Investors Service Inc. This followed another $88 million dividend two years earlier funded through more debt, according to Thomson Reuters Loan Pricing Corp.

Boston-based Berkshire Partners, which raised its latest $4.5 billion fund in 2011, has invested in several other retail companies, including women's apparel chain Aritzia and jeans maker Citizens of Humanity.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.