UK eyewear company Inspecs Group has conditionally agreed to acquire all of the equity interests in German eyewear supplier Eschenbach for approximately £84.7m.
The acquisition extended Inspecs’ presence in markets such as the US and Germany with the addition of Eschenbach’s network of over 250 sales representatives and over 12 international subsidiaries, plus distribution into more than 80 countries.
Robin Totterman, CEO of Inspecs, said: ‘We are delighted to have agreed to acquire Eschenbach, Germany’s number one eyewear company, which in turn owns one of the leading eyewear companies in the USA, Tura.
‘As a high-quality business with a strong management team and track record of margin-accretive growth, Eschenbach represents the ideal fit for Inspecs. Moreover, it will enable the group to penetrate key global markets, broaden our customer reach, strengthen our brand portfolio and capitalise on the compelling structural opportunities that exist in the fragmented global eyewear market.
‘By adding to the group’s resilient, vertically integrated business model, this deal expands our global distribution network and brings over 250 salespeople into the group, propelling Inspecs to a new high by creating one of the largest eyewear companies in the world.
‘We look forward to welcoming the Eschenbach team and working together to build on Inspecs’ recent positive trading momentum while accelerating our long-term growth and delivering value to our shareholders.’
A world leader in eyewear
Inspecs said its greater scale after the acquisition would provide the company with the opportunity to acquire bigger global eyewear licenses.
It added that it was a key strategic step in its growth as a global, vertically integrated, eyewear company and that Eschenbach’s leading position in Germany and the US would help Inspecs in areas where it said it was under-represented.
Key to this was Eschenbach’s portfolio of 15 in-house and licensed brands that Inspecs said was complementary to its business and would position the company as a world leader in eyewear.
It added that Eschenbach’s eyewear would diversify its offering with the addition of a premium product, while its own eyewear was focused on mid-market and entry-level priced products.
When asked by Optician what would happen to operations of the Eschenbach-owned International Eyewear, Inspecs said it had not detailed plans for the different Eschenbach businesses, but added that its brands will continue to operate under the wider Inspecs Group.
An enhanced offering
Inspecs said Eschenbach’s distribution network would provide a significant and immediate extension of the company’s presence internationally that might otherwise have taken several years and significant investment to build organically.
It noted that the acquisition also provided it with an opportunity to enhance its product offering, such as providing a complete frame and lens package through integration with the company’s Norville lens manufacturing facility.
Other areas for growth included an online business to business platform across the enlarged group and the development of Eschenbach’s insurance business in the US.
Eschenbach’s senior management team from both Germany and the US would join Inspecs, which Inspecs said added a wealth of experience to the leadership team and helped to mitigate risks arising from the integration process.
In its financial results for the year ended December 31, 2019, Eschenbach’s revenue was €143.3m, which grew at a compound annual growth rate of 5.9% between 2017 and 2019.
Eschenbach divided its business into two divisions; its eyewear division focused on the design and distribution of frames while its optics division designed, manufactured and distributed specialist optics products.
The eyewear division generated approximately 78% of its revenue in 2019, with approximately 3.6m frames sold, and its optics division generated approximately 22% of revenue for the year.
Its optics division produces vision technology, such as low vision aids, and consumer optics, such as binoculars, and employs more than 70 in-house practitioners