Highmark’s HVHC and Centerbridge Reach Deal for Davis Vision and Visionworks
HVHC INC. AND CENTERBRIDGE PARTNERS REACH DEFINITIVE AGREEMENTS TO DRIVE GROWTH
Centerbridge to expand and grow existing vision insurance business; Highmark to focus on Visionworks retail business; and Highmark Health to accelerate integrated health care and coverage strategy through significant capital infusion
SAN ANTONIO (Aug. 9, 2017) — Centerbridge Partners, L.P. (Centerbridge) and HVHC Inc. (HVHC), a wholly-owned subsidiary of Highmark Inc. (Highmark), today announced that they reached a definitive agreement, whereby Centerbridge will purchase Davis Vision, Inc. (Davis Vision), HVHC's managed vision care subsidiary. As part of the agreement, Davis Vision will be combined with Centerbridge's existing managed vision care portfolio company, Superior Vision, and Highmark will acquire a minority ownership interest in the combined Davis Vision-Superior Vision company.
In a separate transaction, Centerbridge will acquire a minority equity stake in Visionworks, HVHC's optical retail subsidiary. Highmark will retain a controlling ownership interest in Visionworks.
The transactions are expected to close in the fourth quarter of 2017, subject to regulatory approval.
"We are thrilled to be partnering with Highmark and the management of all three businesses across this multidimensional transaction," said Dan Osnoss, managing director of Centerbridge. "We believe the combination of Davis Vision with Superior Vision presents the opportunity to create the leading national managed vision benefit offering with differentiated service for customers and members, and we look forward to supporting Visionworks in continuing to deliver an exceptional retail experience and in its next phase of growth. In the coming months, we will continue to work with Highmark to plan and implement a smooth transition for our respective organizations and stakeholders."
Headquartered in San Antonio, Texas, HVHC and its subsidiaries constitute one of the largest vision/optical enterprises in the United States. HVHC's subsidiaries include managed vision care provider Davis Vision and national optical retailer Visionworks. Each business also has manufacturing facilities. Together, the HVHC companies generated $1.6 billion in revenue in 2016. Centerbridge has existing experience in vision services, through its controlling investment in Superior Vision, a leader in managed vision care.
"In today's dynamic health care marketplace, this is a smart, strategic decision that will best serve the needs of Highmark customers and members, as well as Visionworks, Davis Vision, and Superior Vision customers and the communities that we serve," said David Holmberg, president and chief executive officer of Highmark Health, Highmark's parent company.
Peter Bridgman, who has deep vision industry experience, will join Visionworks as CEO. Peter will lead the company through the transaction's closing and beyond as Visionworks continues on its growth path. Peter served as senior vice president and general manager for LensCrafters,senior vice president and general manager for Pearle Vision and vice president of Strategy & Innovation for EyeMed. Earlier in his career he was a principal in the Health Care Practice at Booz & Company. Jim Eisen, who has been with Visionworks/HVHC for the last nine years and served a three-year tenure as CEO of HVHC, has decided to step down in connection with the transaction.
Highmark acquired and, throughout the last decade, built the HVHC business into an industry leader. The proposed transaction will provide Highmark additional capital to invest in its core businesses and in Highmark Health's strategy of integrating health care delivery and insurance coverage in a new patient-centered, clinician-led model that improves health care quality, access and cost control.
"We have a bold, transformational strategy that will redefine health care," added Holmberg. "Integrated care and coverage is the future, and Highmark Health is going to create it. This transaction is game-changing and will enable us to further accelerate the execution of our strategy — and enhance our competitive position for the benefit of our members, patients and communities — during the balance of 2017 and well into the future."
CapM Advisors acted as financial advisor to Highmark. Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Highmark. Barclays and Macquarie Capital acted as financial advisors to Centerbridge. Goldman Sachs, Bank USA, Barclays, BMO Capital Markets, Macquarie Capital, and Morgan Stanley Senior Funding, Inc. are providing financing for the Davis Vision transaction. Willkie Farr & Gallagher LLP served as legal counsel to Centerbridge. Harris Williams & Co. provided advisory services to Highmark.
ABOUT CENTERBRIDGE PARTNERS
Centerbridge Partners, L.P. is a private investment management firm employing a flexible approach across investment disciplines — from private equity to credit and related strategies, and real estate — in an effort to find the most attractive opportunities for our investors and business partners. As of May 2017, the Firm has approximately $29 billion in assets under management with offices in New York and London. For more information about Centerbridge, visit www.centerbridge.com.
ABOUT SUPERIOR VISION
Superior Vision is a leader in managed vision care, providing vision and eye health solutions to commercial groups, individuals, health plans and government-sponsored programs such as Medicaid and Medicare. Headquartered in Baltimore, the company serves more than 11 million members nationwide. Superior Vision supplies access to the broadest and most diverse eye care provider network in the industry, including independent vision care providers, leading retail optical chains and online eyewear providers. For more information about Superior Vision, visit www.SuperiorVision.com.
ABOUT HVHC INC.
HVHC Inc. is a family of diversified vision businesses. Headquartered in San Antonio, Texas, HVHC is an integrated vision solutions company with two business units — Davis Vision and Visionworks. Davis Vision provides managed vision care solutions and Visionworks has more than 700 retail optical stores across America. Together, HVHC fabricates more than 4.5 million pairs of glasses a year.
ABOUT HIGHMARK HEALTH
Highmark Health, a Pittsburgh based enterprise that employs more than 40,000 people nationwide and serves nearly 50 million Americans in all 50 states, is the second largest integrated health care delivery and financing network in the nation based on revenue. Highmark Health is the parent company of Highmark Inc., Allegheny Health Network, and HM Health Solutions. Highmark Inc. and its subsidiaries and affiliates provide health insurance to nearly 5 million members in Pennsylvania, West Virginia and Delaware as well as dental insurance, vision care and related health products through a national network of diversified businesses that include United Concordia Companies, HM Insurance Group, Davis Vision and Visionworks. Allegheny Health Network is the parent company of an integrated delivery network that includes eight hospitals, more than 2,800 affiliated physicians, ambulatory surgery centers, an employed physician organization, home and community-based health services, a research institute, a group purchasing organization, and health and wellness pavilions in western Pennsylvania. HM Health Solutions focuses on meeting the information technology platform and other business needs of the Highmark Health enterprise as well as unaffiliated health insurance plans by providing proven business processes, expert knowledge and integrated cloud-based platforms. To learn more, please visit www.highmarkhealth.org.
ABOUT HIGHMARK INC.
Highmark Inc. and its health insurance subsidiaries and affiliates collectively are among the ten largest health insurers in the United States and comprise the fourth-largest Blue Cross and Blue Shield-affiliated organization. Highmark Inc. and affiliates operate health insurance plans in Pennsylvania, Delaware and West Virginia that serve 5 million members and hundreds of thousands of additional members through the BlueCard® program. Its diversified businesses serve group customer and individual needs across the United States through dental insurance, vision care and other related businesses. Highmark Inc. is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. For more information, visit www.highmark.com.
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