New Look Vision Group Inc. has entered into a definitive agreement to acquire all of the issued and outstanding shares of Iris, le groupe visuel (1990) Inc. The deal reinforces New Look Vision Group’s position as the largest Canadian retail optical company, and the 8th largest in North America.
The purchase price for the shares of Iris is $120 million on a cash-free and debt-free basis, subject to customary price adjustments. New Look Vision has entered into several financing agreements to finance the acquisition, including the following:
(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 combined entity will have estimated annual revenues exceeding $315 million, as well as estimated consolidated annual revenues exceeding $265 million, and a store network in excess of 375 locations.
“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,” said Antoine Amiel, President and Director of New Look Vision.
The acquisition of Iris is expected to close on (or about) October 1, 2017, subject to customary closing conditions.
Iris was founded 1990 by Dr. Francis Jean in Baie-Comeau, Quebec and based in Laval, Quebec. The retailer boasts 150 locations comprising of 53 corporate, 77 jointly owned and 20 franchise locations. In Canada Iris has 82 stores in Quebec, 36 in British Columbia, 16 in Alberta, 15 in Ontario and one in New Brunswick. For the 12 months ended September 30, 2016, Iris’ adjusted pro forma system-wide revenues were approximately $110 million, while adjusted pro forma consolidated revenues for the same period amounted to approximately $60 million.