The investment firm KKR has agreed to buy 1-800 Contacts, the American online retailer of contact lenses, from AEA Investors, which acquired the company in January 2016.
No financial details were disclosed but the news agency Reuters cited an unnamed source indicating that the deal was worth more than $3 billion.
1-800 was founded 25 years ago and is an innovative direct-to-consumer business. Over the past years, it 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 rapidly renew contact lens prescriptions. The company’s sister brand Liingo Eyewear also introduced Rx Reader, an app that extracts optical parameters directly from a pair of prescription glasses.
The company, which claims to be the largest contact lens retailer in the U.S., has benefited from the Covid-19 pandemic, which prompted contact lens wearers to use its services as brick-and-mortar stores were closed. 1-800 said that during the peak of the shutdown, it experienced a 100 percent year-over-year increase in new and returning customers. During that period, usage of the ExpressExam app increased by 200 percent and the Rx Reader app experienced a 700 percent increase in monthly active users. To support its customer service, 1-800 Contacts hired more than 200 new staff in its Utah and North Carolina operations.
KKR is making the investment through its “Core Investments” strategy, which represents capital targeting longer-term opportunities.