In a statement issued just before Christmas, Highmark, the largest health insurance company in Pennsylvania and a major retailer of optical products in the USA, announced a definitive agreement to acquire Viva International. The financial terms were not disclosed, hut the deal, which is due to close in January, apparently puts an end to the negotiations over a possible merger between Viva and De Rigo's wholesale operations, which had run into a problem because it was not sure who would gain control. The statement confirms that Viva will start distributing in 2005 De Rigo's Furla, Fila, Etro, Givenchy and Escada in North America, indicating that the two companies may continue to cooperate on the sales side.
Highmark's acquisition follows the effective retirement of Harvey Ross, who founded Viva in 1978. On Dec. 13 Viva announced that Mitchell Barkley, a young executive who has been with the company for 17 years, will add on Jan. 1 the title of CEO to his current roles as president and chief operating officer. Ross will continue as a consultant.
Viva is expected to operate as a separate company within the Highmark group, which sees it as a complement to its own existing vision care businesses. These are essentially Davis Vision and Clarity Vision, which generated net income of $18.4 million in 2003. In addition to providing managed vision care operations for more than 13 million people in the USA last year, they operate 2 Total Vision outlets in Pennsylvania and 58 Empire Vision Center stores all over the USA.
Combined with income of $83.0 million from a variety of equity investments, the positive results of the vision and dental care businesses offset an operating loss of nearly $18 million from its core health insurance business last year, allowing Highmark to achieve an operating profit of $71.8 million on total revenues of $8.1 billion. The 66-year-old US company has more than 11,000 employees, mostly in Pennsylvania.