Latest News KKR to Acquire 1-800 Contacts from AEA Investors in Deal Valued at About $3 Billion By Staff Wednesday, September 23, 2020 8:05 AM DRAPER, Utah—1-800 Contacts, the largest retailer of contact lenses in the U.S., today announced a definitive agreement under which global investment firm KKR will acquire the company from AEA Investors. The sale follows many years of strong growth and technology innovation for the direct-to-consumer (DTC) brand, which was purchased by AEA Investors in 2016. Financial terms of the transaction were not disclosed. However, sources close to the deal told VMAIL that the deal is valued at roughly $3 billion, about $2 billion more than when it was acquired by AEA. Over the last several years, 1-800 Contacts has made significant investments in technology and expanding its offerings, including acquiring vision technology startup 6over6 in late 2019 and launching new app-based offerings including ExpressExam, which enables consumers to renew contact lens prescriptions online in minutes. The company's sister brand Liingo Eyewear also introduced Rx Reader, an app that extracts optical parameters directly from a pair of prescription glasses."1-800 Contacts was founded 25 years ago to offer consumers a better way to buy contact lenses. Since the very beginning, we've kept the customer at the center of everything we do," said John Graham, CEO of 1-800 Contacts. "It's gratifying that KKR sees such incredible value in our brand and that they will continue to support us in doing what we do best—delivering the best vision care to consumers with the highest quality customer service."Nate Taylor, KKR partner and co-head of Americas Private Equity, said, "1-800 Contacts is a customer-centric technology-enabled business that is bringing more convenience to the optical space. We are excited to invest behind John and his world-class team."Felix Gernburd, KKR managing director, added, "We believe 1-800 Contacts' singular focus on providing a consistent and high quality customer experience, fueled by industry-leading capabilities and telemedicine solutions, positions them well to continue to drive innovation in the category."As Americans dealt with stay-at-home orders and business closures in response to COVID-19 earlier this year, many contact lens wearers turned to 1-800 Contacts in place of traditional brick-and-mortar sellers. During the peak of the COVID-19 shutdown, the company said it experienced a 100 percent year-over-year increase in new and returning customers.During that period, usage of the ExpressExam app also increased 200 percent and the Rx Reader app experienced a 700 percent increase in monthly active users, according to 1-800 Contacts. In order to maintain the highest quality customer service, 1-800 Contacts said it invested in more than 200 new hires in its Utah and North Carolina operations.KKR is making the investment through its core investments strategy, which represents capital targeting longer-term opportunities. 1-800 Contacts is being advised by Morgan Stanley & Co. LLC as lead financial advisor, Jefferies Group LLC as co-financial advisor, and Fried, Frank, Harris, Shriver & Jacobson LLP as legal advisor. CapM served as special advisor to 1-800 Contacts. Simpson Thacher & Bartlett is serving as legal advisor to KKR.