2012Sonenshine Partners
Advises 1-800 CONTACTS on Sale
of ClearLab
Company Press Release
May 29, 2007
New York, N.Y. - Sonenshine Partners today announced that it has advised 1-800 CONTACTS Inc. ("the Company") (Nasdaq: CTAC) on the sale of its ClearLab business. The Company has agreed to sell ClearLab's flat pack technology and certain other intellectual property to Menicon Co., Ltd., Japan's largest independent contact lens manufacturer. The Company has also agreed to sell ClearLab's manufacturing, distribution and customer support operations to Mi Gwang Contact Lens Co., Ltd., a Korean-based contact lens manufacturer.
At closing, these two transactions will provide the Company with $32 million in cash and $6.5 million in Mi Gwang's stock. In addition, the Company expects to receive from Menicon deferred cash payments of up to $5 million upon Menicon reaching certain milestones, as well as possible earn-out payments over a minimum fifteen-year term. The Company further believes that these transactions may also result in a tax benefit of up to $13 million. Proceeds at closing from the transactions will be used to pay off debt and capital lease obligations.
The transaction with Menicon is expected to close by June 22, 2007. In conjunction with the closing, the Company and Menicon will terminate their current license agreement. The transaction with Mi Gwang is expected to close by June 29, 2007.
About 1-800 CONTACTS, INC.
1-800 CONTACTS offers consumers an attractive alternative for obtaining replacement contact lenses in terms of convenience, price, and speed of delivery. Through its easy-to-remember, toll-free telephone number, "1-800 CONTACTS" (1-800-266-8228), and its Internet web site, http://www.1800contacts.com, the Company sells all of the popular brands of contact lenses. 1-800 CONTACTS offers products at competitive prices, while delivering a high level of customer service.
ClearLab develops and manufactures a wide range of disposable contact lens products and distributes these lenses in markets outside of the United States. More information about ClearLab can be found at its website, http://www.clearlab.com.
About Menicon Co., Ltd.
Menicon Co., Ltd. (http://www.menicon.com), founded by Mr. Kyoichi Tanaka in 1951, is the largest independent contact lens manufacturer in Japan and the only manufacturer in the world dedicated to all areas of contact lens related businesses including development and manufacturing of hyper-Dk GP Lenses, silicone hydrogel lenses, and multi purpose lens care solutions.
About Mi Gwang Contact Lens Co., Ltd
Mi Gwang is one of the leading contact lens manufacturers in Korea. Mi Gwang is publicly traded on the Korea Stock Exchange. More information can be found at its website, http://www.migwang.com or at the Korea Exchange website, eng.krx.co.kr (ticker: 066850)
Sonenshine Partners is a leading independent investment bank focused on providing integrated strategic, financial and corporate advisory services. The firm was founded in 2000 and is headquartered in New York City.