The comparison may sound a little far-fetched, but it's true. Like Luxottica, which is far bigger, Highmark owns a large branded eyewear company, Viva International, bought in February 2005 after its owner, Harvey Ross, failed to agree on a merger with De Rigo's wholesale operations. Highmark has a big managed vision care operation in the USA, and it is in fact its initial core business, although it's smaller than Luxottica's EyeMed.

Highmark moved into optical retailing in 1996 when it bought Davis Vision, which now has 89 stores ? 63 in New York, 23 in New England and three in Pennsylvania. It then formed a subsidiary, Highmark Vision Holding Company (HVHC) to group all its operations in the optical sector. This group is now becoming a very important player in the U.S. optical retail sector following its acquisition of Eye Care Centers of America (ECCA), which was announced just before the MIDO show at the beginning of this month.

Previously controlled by Moulin Global Eyecare Holdings, the now bankrupt Chinese eyewear producer based in Hong Kong, ECCA had remained with its 384 stores the largest specialist independent U.S.-owned optical retailer after Luxottica's acquisition of Cole National. Trading in 36 different states out of San Antonio, Texas, it had revenues of $406.3 million last year, incurring a net loss of $2.8 million.

There were initially 12 bidders for ECCA, but Moulin's liquidators selected only two of them in the end. Besides HVHC, Luxottica or HAL Trust was probably the other final bidder, but this could not be confirmed. HVHC won the contest on the basis of price, paying $602 million for ECCA including the assumption of $297 million debt. The price is equal to about 8.5 times ECCA's earnings before amortization and depreciation (EBITDA), a high ratio similar to the precedent set by Luxottica with its takeover of Cole National, after a long auction process in which Moulin and HAL Trust participated.

HVHC is evidently looking at a major return on its investment because of major synergies with its other existing businesses, following the pattern established by Luxottica. Aside from size and breadth of geographical coverage, Highmark's only remaining difference with Luxottica now is the fact that it has no production facilities of its own, but Robert Gray, chief executive of HVHC, doesn't exclude a possible move in this direction after digesting the costly takeover of ECCA.

HVHC was relatively profitable in 2005, boasting an EBITDA margin of more than 13 percent on revenues of $550 million, but Gray is confident that the margin will grow further in the next few years and that the group will attain a turnover of more than $1.1 billion in 2007 excluding acquisitions. The number of stores is expected to rise to at least 520 and some 40 percent of their revenues will consist of branded and private label products supplied by Viva.

Furthermore, the number of Americans subscribing to insurance policies for vision care is bound to increase dramatically thanks to ECCA's broader geographical coverage. About $300 million of HVHC's revenues came last year from insurance premiums for voluntary or company-funded vision care insurance policies, including discount programs allowing company employees to get discounts at Davis Vision's own stores and others.

Another $140 million out of HVHC's revenues last year came from Viva, which continues to do well under its new ownership, with a 10 percent sales increase budgeted for this year and no major changes in operations. On the retail side, while planning to consolidate its store networks, HVHC is now considering some re-branding action to obtain a greater impact on the market. While Davis Vision's stores trade under five different banners, ECCA is a conglomerate of 11 regional chains, each regarded as a leader in its respective market.

In connection with the merger into HCVH, ECCA has begun a cash tender offer for its senior outstanding subordinated notes due in 2015. The disposal of ECCA basically puts an end to the liquidation of Moulin's operating assets. The only remaining asset is a shell company in Hong Kong that is available for a takeover if another one wants to have a quick entry into the stock exchange.