WellPoint To Sell 1-800 Contacts To Private-equity Firm Thomas H. Lee Partners

(RTTNews) - Health insurer WellPoint, Inc. (WLP) agreed Tuesday to sell online contact lens retailer 1-800 Contacts, Inc. to private-equity firm Thomas H. Lee Partners for undisclosed terms. Additionally, the company also agreed to sell glasses.com and its virtual try-on technology to Italian eyewear company Luxottica Group SpA (LUX). Both the deals are expected to close in the first quarter of 2014.

The divestitures are part of Wellpoint's strategy to focus on growth opportunities in its core health insurance business.

"1-800 CONTACTS has strong brand recognition and a leading direct-to-consumer model. However, as we prepare for the coming changes to the health care system, we are focused on our core growth opportunities across both our commercial and government business segments. Proceeds from this transaction will support our continued capital deployment strategies," WellPoint CEO Joseph Swedish said in a statement.

WellPoint had acquired the privately-held 1-800 Contacts from its private equity owner Fenway Partners LLC for about $900 million in June 2012.

Draper, Utah-based 1-800 Contacts was earlier taken private by Fenway Partners in September 2007 for $24.25 per share in a deal valued at about $340 million. It became a public company in February 1998 through an initial public offering of its common stock.

1-800 Contacts, the world's largest contact lens store, sells contact lenses through web, phone or mobile. This is done 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.

The company sells most of the popular brands of contact lenses, including those manufactured by Johnson & Johnson Vision Care, CIBA Vision, Bausch & Lomb, CooperVision and Ocular Sciences.

WellPoint noted that it expects to record an impairment charge in the range of $0.52 to $0.57 per share in the fourth quarter of 2013 in connection with the divestiture.

WellPoint also said it now expects earnings for fiscal 2013 to be at least $7.88 per share, down from the prior expectation of at least $8.45 per share, due to the impairment charge. However, it continues to expect adjusted earnings of at least $8.40 per share.

On average, 23 analysts polled by Thomson Reuters expect the company to report earnings of $8.51 per share for the full-year 2013. Analysts' estimates typically exclude special items.

WLP closed Tuesday's regular trading session at $91.08, up $1.80 or 2.02% on a volume of 1.83 million shares.