WellPoint buying 1-800 Contacts for about $900M

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Indianapolis-based WellPoint Inc. has agreed to buy eyewear and contact-lens retailer 1-800 Contacts Inc. for about $900 million, The Wall Street Journal reported.

The deal is the latest example of health insurers seeking to diversify into higher-margin businesses while strengthening their ties to consumers.

"We see a unique way of tying 1-800 Contacts into our product design," Wayne DeVeydt, WellPoint's chief financial officer, told the Journal.

WellPoint officials told the newspaper that they might develop health plans and vision coverage that offer special discounted access to contacts and eyewear.

The companies would not confirm the purchase price, but a source told the newspaper it was close to $900 million.

Draper, Utah-based 1-800 Contacts is the largest direct-to-consumer retailer in the contact lens market.  The firm, which is majority owned by New York-based Fenway Partners, sells contacts and eyewear by phone, Internet, mail and fax. CEO Jonathan Coon said its annual revenue is about $400 million.

DeVeydt told Journal that 1-800 Contacts has after-tax margins in the “double-digit range” compared with about 5 percent for WellPoint’s health insurance lines.

Insurers have been seeking diversification opportunities in part because the federal health care law is expected to pinch profits on traditional coverage. Last year, WellPoint rival UnitedHealth Group rolled out plans to sell hearing aids directly to consumers over the Internet.

The health overhaul law is accelerating a shift toward people selecting their own health-care products and health coverage. DeVeydt told Journal that trend “is not slowing down,” regardless of the outcome of the Supreme Court’s review of the law.


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  1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

  2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

  3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

  4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

  5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.