The deal was led by BofA Merrill Lynch, Goldman Sachs, Citigroup, Morgan Stanley, UBS, Jefferies, and Wells Fargo. Shares are expected to open for trading later this morning on the Nasdaq.
National Vision (EYE) is one of the largest optical retailers (eye exams, eyeglasses and contact lenses) in the US with a focus on the value segment (cost-conscious and low-income consumers) as it offers an opening price point that strives to be among the lowest in the industry. EYE operates 980 retail stores across five brands and 19 consumer websites. Its biggest brand is America's Best, which operates 559 stores in high-traffic strip centers.
EYE has two reportable segments: its owned & host segment and its legacy segment. Its owned & host segment includes its two owned brands, America's Best and Eyeglass World, and its Vista Optical locations in Fred Meyer stores.
Within this segment, EYE also provides low-cost vision care products and services to American military service members by operating Vista Optical locations on military bases across the country. Its legacy segment consists of EYE’s 27-year strategic relationship with Walmart to operate Vision Centers in select Walmart stores. In addition, through its FirstSight unit, EYE arranges for the provision of optometric services at almost all of the optometric offices next to Walmart and Sam's Club stores in California.
Here is EYE’s portfolio of brands:
• America's Best operates 559 stores located in high-traffic strip centers next to other well-known, off-price retailers, such as TJ Maxx and Marshalls. For the past 20 years, America's Best has led with a signature offer of an eye exam and two pairs of eyeglasses for $69.95. EYE believes there is no better value in the marketplace and that this affordability has driven ongoing traffic growth and high customer loyalty along with increased market share.
• Eyeglass World operates 108 stores, all with in-store lens-grinding laboratories. Eyeglass Worlds are bigger stores with a wider selection of brands and price points. Eyeglasses from Eyeglass World start at two pairs for $78.00. Because this brand has an on-site lab, customers can get their eyes examined and walk out with glasses in the same day.
EYE has been one of the fastest growing US optical retail chains over the past five years, with sales having a 14% CAGR, 3x the industry average growth rate. EYE believes that its brands can grow to at least 1,000 America's Best stores and at least 850 Eyeglass World stores over time.
Taking a quick look at the financials, the company is profitable and posting good top line growth. Revenue in 2016 rose 12.6% to $1.20 bln. For 1H17, revenue rose 14.5% YoY to $707.4 mln. Same store comps are always important for retailers. EYE has generated positive comps in every quarter since 2002, when the current management team took over, including during periods of economic contraction. The vast majority of comp growth in recent years has been driven by increased traffic. The typical eyewear replacement cycle (2-3 years) provides ample opportunity to increase sales from existing customers. Finally, there are no plans for a dividend in the foreseeable future.