PARIS (The Deal) -- French eyewear maker Essilor International said on Friday, Nov. 8, that it has agreed to bid $284 million for Nasdaq-listed Costa (ATX) to expand into the growing market for prescription sunglasses.
The deal values Lincoln, R.I.-based Costa at $21.50 a share, a 9% premium to its Thursday closing price of $19.98. It equates to an enterprise value of about $270 million taking into account cash held by Costa.
"The high quality sunglasses and prescription sun lenses segment offers high potential given its low penetration rate," Essilor Chairman and CEO Hubert Sagnieres said in a statement.
The offer has the backing of the board of Costa, formerly A.T. Cross, as well as shareholders controlling 34% of the target. If successful, the sale will complete the rapid disappearance of Costa, which began in September with the sale of its Cross Accessory division to New York buyout shop Clarion Capital Partners for $54 million in cash.
Essilor, which is the world's largest maker of corrective eye lenses, said it plans to expand Costa's presence beyond the company's principal market of Southeastern U.S. -- Costa's main operations are in Daytona Beach, Fla. -- and increase sales of corrective sunglasses lenses, which account for just 5% of Costa's current sales.
Costa, which sells glasses under the Costa and Native Eyewear brands, posted net profit from continuing operations of $5.4 million for the first nine months of 2013.
Essilor's bid for Costa comes five months after the Charenton-le-Pont based company agreed to pay $1.73 billion to buy the 51% it didn't own in Transitions Optical, a maker of variable-tint lenses. Pittsburgh-based coatings maker PPG Industries owned the stake.