Zeiss to buy Sola......

[hcjilson]

From Vision Monday today:
"Carl Zeiss AG and Financial Partner to Buy SOLA International
SAN DIEGO -SOLA International Inc. (NYSE:SOL) announced late Sunday that a newly formed company, which will consist of the eyeglass business of Carl Zeiss AG and will be owned by Carl Zeiss AG and EQT III fund ("EQT"), has signed a definitive merger agreement with SOLA whereby the new enterprise will pay $28.00 per share in cash for SOLA's common stock. The total purchase price, including the assumption of approximately $285 million of debt, is approximately $1.1 billion and represents a premium of approximately 30% to the December 3, 2004 closing price of SOLA. The newly formed company will be owned 50:50 by Carl Zeiss AG and EQT.

Jeremy C. Bishop, President and Chief Executive Officer of SOLA, said, "This transaction offers significant benefits to shareholders, customers, suppliers and employees of SOLA and Carl Zeiss. The combined company will have revenues of approximately EUR 800 million, employ approximately 9,000 people and position the company as a leading provider of ophthalmic lenses globally. Further, this merger represents an ideal strategic fit for SOLA as it enables the company to strengthen its geographic presence in Europe and Asia Pacific and provide for improved utilization of the company's manufacturing and distribution facilities."


Dr. Michael Kaschke, Member of the Executive Board of Carl Zeiss AG, said: "I am excited that we can develop the Carl Zeiss eyeglass business with its technology, innovative products and strong Zeiss brand into a real global company. The merger with SOLA is an excellent opportunity to create a company that is represented in all important markets across the globe."


Udo Philipp, Partner at EQT Partners, said, "EQT is excited to act as a catalyst in combining these two great companies. EQT looks for companies with strong market position, excellent management, and potential for growth. Both SOLA and Carl Zeiss fit this profile. Our intent will be to assist management in the company in its efforts to improve the merged company's competitive position and thereby its profit and cash flow."


Completion of the transaction, which has been unanimously approved by the boards of directors of the companies, is subject to customary closing conditions, including approval by SOLA shareholders, United States and international anti-trust approvals, completion of the financing for the merger and Carl Zeiss' contribution of its business to the newly formed company. The newly formed company has received a commitment letter for a portion of the financing needed to complete the merger. The commitment letter does not contain any significant conditions other than those set forth in the merger agreement and the completion of definitive documentation. The remainder of the financing will be provided by Zeiss and EQT. The merger is expected to be completed during the first calendar quarter of 2005.


UBS Securities LLC served as a financial advisor to SOLA. Cahill Gordon & Reindel LLP and Gardner Carton & Douglas LLP jointly served as SOLA's legal advisors.


SOLA designs, manufactures and distributes a broad range of eyeglass lenses, primarily focusing on the faster-growing plastic lens segment of the global lens market, and particularly on higher-margin value-added products. SOLA's strong global presence includes manufacturing and distribution sites in three major regions: North America, Europe and Rest of World (primarily Australia, Asia and South America) and approximately 6,600 employees in 27 countries servicing customers in over 50 markets worldwide.


Carl Zeiss is a leading international group of companies operating worldwide in the optical and opto-electronic industry. Carl Zeiss AG is headquartered in Oberkochen, Germany. The Carl Zeiss Group is structured as six business groups that operate with sole responsibility. They are generally ranked first or second in the three strategic markets of biosciences and medical technology, system solutions for industry and optical consumer goods. They offer products and services for biomedical research and medical technology, system solutions for the semiconductor, automotive and mechanical engineering industries, as well as high quality consumer goods such as eyeglass lenses, camera lenses and binoculars. The Carl Zeiss Group is directly represented in more than 30 countries and operates production facilities in Europe, America and Asia. In fiscal year 2004 the global workforce of approximately 13,700 employees generated revenue of about EUR 2.1 billion.


EQT is one of Europe's most renowned private equity companies. EQT was founded in 1994 in Sweden by Investor AB, part of the Wallenberg group. EQT's strategy is an active ownership in close co-operation with the management of the companies it acquires, to develop and implement value-enhancing growth strategies. Today EQT is the leading North European group of private equity funds with equity commitments exceeding EUR 5 billion. EQT Partners, acting as the exclusive investment advisor to all EQT funds, has offices in Munich, Stockholm, Copenhagen and Helsinki. EQT private equity funds have invested in more than 30 companies, with combined sales in excess of EUR 7 billion."

[drk]

This consolidation stuff is getting ridiculous.

[For-Life]

Interesting, but won't it just cannelbalize the brands? How will the Gradel Top work with the SolaOne and the SolaMax? How with Carat work with Teflon?

[Chris Ryser]

I am surprised,,,,,,,,,,,,,,,,,,,,,,,and then not surprised.

Apparently Rodenstock just gold sold.............to some Swiss investors........have not heard any proof yet.

SOLA to ZEISS which confirms what I have been saying on the Optiboard for the last 2 years. ZEISS, ESSILOR, HOYA and LUXOTTICA will be they major players in the optical world market.

The will own every important optical laboratory laboratory on a worrld wide basis and will eventually branch out into the retail business as LUXOTTICA has already done.

It looks that there are some interesting developments ahead, some heads will get chopped and the optical world will shrink considerably.

Competition will get smaller and Optiboarders will not have to ask anymore which lens is better...........they will be all the same very soon.

[drk]

Hey, Chris, you made me think of something...

With Zeiss purchasing Sola, it makes Sola unavailable for purchase by "the evil one".

I wonder if that was a factor in their decision? Is Zeiss worried about Lux domination?

[For-Life]

I still question the choice of the combination. For me it would of made more sense to invent in Younger, Shamir, and Signet Armorlite, because there is a conflict of products that the companies offer.

However, I think this will be good for the industry. The small companies are having a lot of trouble competing with Essilor, and even some of the big companies are having trouble. Essilor has the financial resources to do a lot. We are heading to an Oligopoly, and it will be interesting to see how the new competition of the "Big Guys" will direct the industry. Sure we are moving towards an oligopoly, but maybe the oligopoly can potentially stop the formation of a monopoly.

[Spexvet]

Hey, Chris, you made me think of something...

With Zeiss purchasing Sola, it makes Sola unavailable for purchase by "the evil one".

I wonder if that was a factor in their decision? Is Zeiss worried about Lux domination?

I'd worry that this move would drive Lux to "unify" with Essilor. A LensCrafters selling Varilux and Crizal would be formidable.

Warning to Essilor: if you team up with Luxottica, I won't sell your product, either.:angry:

[For-Life]

I'd worry that this move would drive Lux to "unify" with Essilor. A LensCrafters selling Varilux and Crizal would be formidable.

Warning to Essilor: if you team up with Luxottica, I won't sell your product, either.:angry:

It might be my ignorance, but I do not think that Essilor wants to be teamed with Luxottica. However, Lenscrafters does dispense some Essilor product.

[mrba]

I'd worry that this move would drive Lux to "unify" with Essilor. A LensCrafters selling Varilux and Crizal would be formidable.

Warning to Essilor: if you team up with Luxottica, I won't sell your product, either.:angry:

Yes, if they could put crizal on a lens in house they would kill us.

Ooops, not gonna happen.

[Chris Ryser]

However, I think this will be good for the industry. The small companies are having a lot of trouble competing with Essilor, and even some of the big companies are having trouble.

Looking at your postings you made over the last many month I have sometimes the feeling that you could be either a fanatic on ESSIlOR products ,or they have you on their payroll or on a commission basis on the pro ESSILOR postings you make.

You are an optician in Ontario, hopefully independent. This means with big corporation takeovers the day' s of your independence are getting closer to be numbered, and you do not see it.

We live in a free world...................and if this is a continuing trend it will be no more. You will become a yo-yo or a go-go of the big corporation act.

[For-Life]

Looking at your postings you made over the last many month I have sometimes the feeling that you could be either a fanatic on ESSIlOR products ,or they have you on their payroll or on a commission basis on the pro ESSILOR postings you make.

You are an optician in Ontario, hopefully independent. This means with big corporation takeovers the day' s of your independence are getting closer to be numbered, and you do not see it.

We live in a free world...................and if this is a continuing trend it will be no more. You will become a yo-yo or a go-go of the big corporation act.

I am not as much a fan of Essilor's products as a Devil's Advocate for people who take pretty severe shots at the company. It is a natural role that I play. If you have paid attention to my posts I try to incorporate similar products from other companies, because lets face it, lenses from Essilor are not much different from lenses from any other company. From your posts I know you feel the same way. Additionally, I embrace how Essilor has developed its marketing strategy and I feel the way they have implemented it has made them a strong force.

As for the big corporations, well Chris, we know it is a fact that our industry will be all big corporations. We know that the small guys will not be able to compete with Essilor, Hoya, or Zeiss. Those companies have millions if not billions to spend on things like research and development, marketing, and expansion where the little guys just do not have the money. So as I said in my post it will either be one of two things that will happen:

1. Essilor becomes the monopoly (we are heading this way)
2. Several big companies make the lens market an oligopoly

I prefer the later.

[Chris Ryser]

Those companies have millions if not billions to spend on things like research and development, marketing, and expansion where the little guys just do not have the money.

I strongly have to disagree with above statement...........................

There has been no important invention made in the ophthalmic lens field in over the last 50 years since the Societe de Lunettier (today ESSILOR) came up with the progressive lens. All we have seen since is some minor re-designs to make it look updated.

Aspheric lenses are just about the only new invention in lenses and they were NOT introduced bei neither of the large corporation. A Miami company, can't remember the name had them for years prior to anybody else.

Photochromatic plastic lenses were sold by Foster Grant already in 1981.
Usable Photochromatic plastic lenses seems to be the only new baby on the market over the last 22 years that was developed and supported by one of the large corporations.

High index plastic materials have existed way before CR39 (PPG) was developed and the newest ones do not come from the optical industry either.

Polycarbonate lenses were made in Italy already in the late 1950s and have only been accepted in Europe until a short while ago.

Hard coatings gave not been introduced nor invented by either one of the big guy,s. GE and Owens-Illinois were one of the first ones to put a thermocure material on market. UV cure hard coats, based on a system that had been used for years prior in the printing industry were introduced by Optical Innovations and my own company in 1983 and 1984.

AR coatings has been invented by ZEISS more than half a century ago but was used mainly for camera and instrument use. And the first company to vacuum coat ophthalmic glass lenses was in Milan in the mid 50s, (I believe it was the predecessor of SATIS) The use of vacuum coating is a 1000 fold larger in othert industrial fields than the optical industry.

Hydrophobic coatings have been invented by myself in 1986 and the slickcoat on top of the AR coating, as advertised by the big corporations had aslo been my baby, introduced and sold since 1990. It took these major corporations over 10 years to pick up the principle. Large corporations are not flexible and function like governments full of red tape.

BPI invented plastic lens tinting in the early 70s and had been copied by many of other companies.

UV protection on glasses has NOT been the idea of the large coroporations either. Armorlite had a UV absorbing lens in 1981 which was discontinued a few years later when it became standard in the optical trade to get better UV absorbtion by doing the treatment in house.

The only new invention over 30 years in the lens tinting field is my patented invention Micro-Tints which is just now becoming the standard lens tinting system for the US Navy and Army mainly because of new health standards.

There must be more that I did not mentionm ...............than just the above

Conclusion:

All these techniques and ways of doing thing in our field of the optics have not come from millions spent by the large corporation. They have researched the amrket and adopted ideas that came mostly from independents which they now absorb and take over and include in their govenment like structure where there will be no more competition.

In my eyes there will be less novelties in the near future because the challenge to come up with new goodies will be gone by eliminating the small companies that do have the guts and the flexibility to really invent.

Wisdom To STart The Day
"Our Age of Anxiety is, in great part, the result of trying to do today's jobs with yesterday's tools."