INDIANAPOLIS--()--WellPoint, Inc. (NYSE: WLP), one of the nation's largest health benefits companies, announced today that it has entered into an agreement to acquire 1-800 CONTACTS, Inc., the largest direct-to-consumer retailer of contact lenses in the U.S. whose model is built on providing a superior customer experience and a wide selection of products at affordable prices. Consumers are able to order contacts and glasses in a simple, fast and hassle-free manner using the technology – web, phone or mobile—that is most convenient for them.
“1-800 CONTACTS has rapidly expanded through exceptional brand recognition, convenient customer service and an industry-leading direct-to-consumer model. We believe these assets will drive continued strong future growth in the eyewear marketplace and also significantly enhance our efforts to build trusted relationships with consumers across the entire country.”
“This acquisition strategically aligns with our efforts to capitalize on new opportunities for growth, and further diversifies the company’s revenue stream into the complementary and higher-margin eyewear business,” said Angela F. Braly, chair, president and chief executive officer of WellPoint. “1-800 CONTACTS has rapidly expanded through exceptional brand recognition, convenient customer service and an industry-leading direct-to-consumer model. We believe these assets will drive continued strong future growth in the eyewear marketplace and also significantly enhance our efforts to build trusted relationships with consumers across the entire country.”
1-800 CONTACTS offers consumers a convenient and affordable way to purchase contact lenses through its easy-to-remember, toll-free telephone number, “1-800 CONTACTS” and its www.contacts.com web site. The company also offers frames and lenses through its glasses.com web site.
“We are excited to be a part of not only one of the largest health benefits providers in the country, but also the most customer-focused,” said Jonathan Coon, chief executive officer and co-founder of 1-800 CONTACTS. “We look forward to joining WellPoint to serve the eyewear needs of our mutual customers. Our companies share common goals of providing consumers with the highest level of service and making the experience as simple as possible.”
“1-800 CONTACTS serves approximately 3.3 million customers today, yet with more than 38 million people wearing contacts and more than 140 million people wearing glasses in the U.S., there is a significant opportunity to attract new customers as we strive to deliver the best health care value both in the eyewear industry and other health care products,” said Braly.
Financial terms of the transaction were not disclosed. The acquisition is expected to close in the third quarter of 2012, and is subject to standard closing conditions and customary approvals required under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction will be financed from available cash on hand and is expected to be slightly dilutive to earnings per share in 2012 by approximately $0.04 due to transaction and integration costs. WellPoint now expects 2012 net income to be at least $7.80 per share, including $0.19 per share of net investment gains from the first quarter of 2012.
About WellPoint, Inc.
At WellPoint, we believe there is an important connection between our members’ health and well-being—and the value we bring our customers and shareholders. So each day we work to improve the health of our members and their communities. And, we can make a real difference since we have nearly 34 million people in our branded health plans, and more than 62 million people served through our subsidiaries. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas, WellPoint’s plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). WellPoint also serves customers throughout the country as UniCare and in certain California, Arizona and Nevada markets through our CareMore subsidiary. Additional information about WellPoint is available at www.wellpoint.com
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
WellPoint and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), including statements in this press release, in presentations, in filings with the Securities and Exchange Commission, or SEC, in reports to shareholders and in meetings with analysts and investors. The projections referenced in this press release are forward-looking and they are intended to be covered by the safe harbor for “forward-looking statements” provided by PSLRA. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)”, “intend”, “estimate”, “project” and similar expressions are intended to identify forward-looking statements, which generally are not historical in nature. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in our public filings with the SEC; increased government participation in, or regulation or taxation of health benefits and managed care operations, including, but not limited to, the impact of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010; the outcome of the proceeding pending before the U.S. Supreme Court challenging the constitutionality of such acts; trends in health care costs and utilization rates; our ability to secure sufficient premium rates including regulatory approval for and implementation of such rates; our ability to contract with providers consistent with past practice; competitor pricing below market trends of increasing costs; reduced enrollment, as well as a negative change in our health care product mix; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon and funding risks with respect to revenue received from participation therein; a downgrade in our financial strength ratings; litigation and investigations targeted at health benefits companies and our ability to resolve litigation and investigations within estimates; medical malpractice or professional liability claims or other risks related to health care services provided by our subsidiaries; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; non-compliance by any party with the Express Scripts, Inc. pharmacy benefit management services agreement, which could result in financial penalties, our inability to meet customer demands, and sanctions imposed by government entities, including the Centers for Medicare & Medicaid Services; events that result in negative publicity for us or the health benefits industry; failure to effectively maintain and modernize our information systems and e-business organization and to maintain good relationships with third party vendors for information system resources; events that may negatively affect our license with the Blue Cross and Blue Shield Association; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; intense competition to attract and retain employees; unauthorized disclosure of member sensitive or confidential information; changes in the economic and market conditions, as well as regulations that may negatively affect our investment portfolios and liquidity; possible restrictions in the payment of dividends by our subsidiaries and increases in required minimum levels of capital and the potential negative effect from our substantial amount of outstanding indebtedness; general risks associated with mergers and acquisitions; various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations; future public health epidemics and catastrophes; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by federal securities law, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in our SEC reports.