France’s Essilor buys FGX for $565M

FGX, WHICH SELLS eyewear under brands like Foster Grant, will become a subsidiary of Essilor International, the world’s largest maker of eyeglass lenses.
Posted 12/16/09

SMITHFIELD – FGX International Holdings Ltd. has reached a deal to be acquired for around $565 million by Essilor International SA, the world’s largest maker of eyeglass lenses, the companies announced Wednesday.

FGX International shareholders will get $19.75 per share in cash from Essilor, which is based in Charenton-le-Pont, France, under the terms of a merger agreement approved by both companies’ boards of directors. The French company will also pay off $100 million in debt owed by FGX.

The closing price is slightly higher than the conditional bid of $18 per share that Essilor made in early November but lower than the $23 that FGX wanted, according to a Nov. 18 report in The Daily Telegraph of London.

FGX will become a wholly-owned subsidiary of Essilor once the merger is finalized, which is expected to happen next year. The companies said FGX will be a stand-alone business unit of Essilor and its headquarters will remain in Smithfield. FGX will also keep its offices in California, Toronto, England, New York City, Mexico and China.

FGX CEO Alec Taylor, who will remain in place along with the rest of the local company’s current management team, said the deal would benefit shareholders.

“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,” Taylor said in a statement. “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.”

Providence Business News reported last month that FGX had put in place a new contract with its top executives that increased the payouts they would receive if the company is taken over. Those agreements took effect on Nov. 6.

FGX traces its roots back to 1919, when the company was founded by Sam Foster as Foster Grant to sell women’s hair accessories. The company began selling its well-known FosterGrant eyeglasses a decade later.

FGX International began trading on the Nasdaq Stock Exchange after its initial public offering in 2007.

Hubert Sagnières, Essilor’s chief operating officer, said adding FGX to his company’s portfolio would expand its product offerings. Sagnières is scheduled to take over as Essilor’s CEO on Jan. 1.

“It also strengthens the company’s business base and enhances its growth prospects,” he said. “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.”

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