New Look Vision Group Inc. (TSX: BCI), a portfolio company of Benvest Holdings Limited, has entered into a definitive agreement to acquire all of the issued and outstanding shares of Iris, le groupe visuel (1990) Inc. for a purchase price of $120 million on a cash-free and debt-free basis, subject to customary price adjustments.
Founded in 1990 by Dr. Francis Jean in Baie-Comeau, Quebec and based in Laval, Quebec, Iris has grown to become a leading optometrist based retail eye care provider across Canada with a network of 150 locations, comprising 53 corporate, 77 jointly owned and 20 franchise locations. The Iris banner is recognized nationally with locations in Quebec (82), British Columbia (36), Alberta (16), Ontario (15) and New Brunswick (1).
Adjusted pro forma system-wide revenues of Iris for the twelve months ended September 30, 2016 amounted to approximately $110 million1 while adjusted pro forma consolidated revenues for the same period amounted to approximately $60 million.
New Look Vision has entered into various financing agreements to finance the acquisition, including: (i) a $38.75 million increase of its senior secured term facility with its bank to $95 million; (ii) an arrangement for a $35 million junior unsecured debt facility and a $20 million equity private placement of 646,400 subscription receipts at a price of $30.94 per subscription receipt with a Quebec-based fund; and (iii) a $30 million concurrent equity private placement of 969,600 subscription receipts at a price of $30.94 per subscription receipt.
The private placements are expected to close on or about July 18, 2017. The acquisition of Iris is expected to close on or about October 1, 2017, at which time the 1,616,000 subscription receipts issued pursuant to the private placements are expected to be automatically exchanged into 1,616,000 Class A Common Shares of New Look Vision.
“We feel very privileged to welcome the Iris team into our organization. The transaction will be a major step forward for both organizations. Iris, based in Laval (QC) and Langley (BC), will operate as a stand-alone business unit within New Look Vision Group. Iris adds to New Look Vision Group’s current network a strong platform for the consolidation of the optometry based retail segment of the Canadian optical industry,” said Antoine Amiel, President and Director of New Look Vision.
“The combined entity will have estimated annual system-wide revenues exceeding $315 million, estimated consolidated annual revenues exceeding $265 million and a store network in excess of 375 locations reinforcing New Look Vision Group’s position as the largest Canadian retail optical company and the 8th largest in North America. We will be the dominant player in Quebec, the Atlantic Provinces and British Columbia. This should lead to greater efficiencies and lower operating costs in many areas of operations,” added Amiel.
“A relationship of trust built over many years between the management teams of Iris and New Look Vision Group has evolved today into a common endeavour. The two businesses have been highly successful by sharing common values of hard work and integrity, dedication to eye care, and a passion for retail optical. Joining New Look Vision Group, we, at Iris, are very much looking forward to fulfilling Dr Jean’s vision of collaborative eye care for Canadians,” said Dr. Michael Chaiken, President of Iris.
New Look Vision is a leader in the eye care industry in Canada comprised of a network of 227 corporate stores mainly under the New Look Eyewear, Vogue Optical and Greiche & Scaff banners and laboratory facilities using state-of-the-art technologies.
As of June 30, 2017, New Look Vision had 13,624,123 Class A common shares issued and outstanding.
W. John Bennett, Chairman of New Look Vision, CEO of Bevest Holdings and Chairman of MacKinnon, Bennett & Co., directly, indirectly through Bevest Holdings and along with joint actors, controls 44% of New Look Vision outstanding shares.
photo credit: Iris