New Look Eyewear has entered into a definitive agreement to acquire certain optical assets and business of Optic Direct, carrying on business under the Greiche & Scaff banner in Quebec. The acquisition is expected to close on or about October 1, 2014.
Founded in 1976, Greiche & Scaff has grown to become an established and well-recognized enterprise in Quebec’s optical retail markets. The assets and business to be acquired by New Look include 49 corporately owned stores in Quebec, 42 of which are in the greater Montreal region, and an integrated lens processing facility in Montreal. Revenues for the 12 months ended March 31, 2014 amounted to approximately $30.7 million.
The purchase price of the assets and business of Greiche & Scaff is $17.75 million, subject to customary price adjustments. New Look has entered into various financing arrangements to finance the acquisition, including a $10 million increase of its senior secured debt facility with its bank syndicate to $53 million and a “bought deal” private placement agreement for the issuance of 500,000 subscription receipts at a price of $20 per receipt with a syndicate of Canadian investment firms.
“This is an important building block in our strategic plan for participating in the consolidation of the Quebec and Canadian retail optical markets,” stated Antoine Amiel, vice-chairman of New Look. “It solidifies our Quebec base, particularly in the metropolitan Montreal region, and results in the acquisition of an additional established and respected banner in the retail optical market. It also gains us significant operating efficiencies.”
“We will continue to operate the Greiche & Scaff business as a separate banner and store network within the New Look/Vogue Optical umbrella,” added New Look President Martial Gagné. “We very much look forward to working with the Greiche & Scaff employees, associated optometrists and opticians and welcoming them to our group.”
The acquisition of Greiche & Scaff is subject to the usual closing conditions, at which time the 500,000 subscription receipts issued pursuant to the private placement are expected to be automatically converted into 500,000 Class A common shares of New Look.
Last November, New Look acquired the largest integrated optical retailer in Atlantic Canada, Vogue Optical, for about $74 million.