NEW YORK (Reuters) - Private equity firm AEA Investors is exploring a sale of 1-800 Contacts Inc that could value the U.S. contact lens retailer at more than $2 billion, including debt, according to people familiar with the matter.
AEA has hired Goldman Sachs to manage the process, the sources said, who requested anonymity because the matter is private.
Draper, Utah-based 1-800 generates just under $150 million in 12-month earnings before interest, taxes, depreciation and amortization (EBITDA), the sources said.
AEA and Goldman Sachs declined to comment. 1-800 Contacts did not immediately respond to a request for comment.
It would be the latest deal in the U.S. eye care space, with Goldman Sachs Group Inc’s merchant banking unit last year acquiring Capital Vision Services LP, which manages MyEyeDr. optometry centers.
The contact lens market generated $11.9 billion in revenue worldwide in 2019 and is seen growing by more than 5% on an annualized basis through to 2025, according to Grand View Research.
In recent years, the eyewear market has faced new competition from start-ups such as Warby Parker which make stylish-yet-inexpensive eyewear.
AEA in 2015 agreed a acquire a majority stake in 1-800 Contacts from buyout firm Thomas H. Lee Partners, which retained a stake in the company after the deal.
Reporting by Joshua Franklin and Greg Roumeliotis in New York; editing by Nick Macfie