New Look Eyewear buying Atlantic Canada chain Vogue Optical for $74M

A free eye exam is performed on a patient at the Remote Area Medical clinic inside the Los Angeles Sports Arena on Wednesday, April 28, 2010, in Los Angeles. (AP Photo/Damian Dovarganes)

MONTREAL -- New Look Eyewear Inc. (TSX:BCI) is spending $74 million to acquire Charlottetown-based Vogue Optical Inc. in a move that will make it the third-largest integrated optical retailer in Canada.

Vogue, founded in 1979, has a 65 stores -- including 21 in Nova Scotia, 21 in New Brunswick, 15 in Newfoundland and Labrador, five in Prince Edward Island and three other provinces.

The company, which also has a lens processing facility, reported revenues of about $40 million in the 12 months to Aug. 31.

"We feel privileged welcoming the Vogue Optical team in our organization," New Look vice-chairman Antoine Amiel said in a statement announcing the deal Wednesday.

"Vogue Optical will operate as a stand-alone business based in Charlottetown," Amiel said, adding that both groups will continue to grow organically and by acquisition in their respective markets.

The combined entity will have revenues exceeding $128 million and a store network with more than 140 locations, making it the third-largest Canadian integrated retail optical company and the eighth- largest in North America.

In connection with this transaction, New Look has entered into various financing arrangements providing for a senior secured debt facility of up to $75 million with a syndicate of major Canadian banks.

The financing is comprised of an acquisition term facility of up to $65 million and a $10-million revolving facility, as well as a maximum of $25 million of equity financing.

New Look has also entered into an arrangement for a $15-million junior unsecured debt facility with a Quebec-based fund which may be used to finance a portion of the acquisition, thus reducing the draw on the acquisition term facility.

The deal is expected to close in early December.