U.S. Vision Sets Sights on a Sale
October 9, 2000
Thinly traded and struggling optical retailer U.S. Vision Inc. (USV) put itself on the block Sept. 29 after having received a $4-per-share takeout offer in August which it deemed inadequate.
Closely held USV received the unsolicited $31 million bid from Norcross Investment Group. Newly appointed USV Chief Financial Officer George McHenry has stated publicly that the company's decision to review strategic alternatives and the hire of Janney Montgomery Scott was an effort to see what better offers might be attained. McHenry did not return a call, and neither Norcross could nor the lead banker at Janney could be reached.
Shares of $25 million market cap, Glendora, N.J.-based USV didn't budge on the announcement, but the stock rose to $3.22 at press time.
Jean Ralph, an analyst with First Union Securities, said consolidation ought to occur between the store-within-a-store prescription retailers. The top retailers are the bankrupt Vista Eyecare Inc. which sells in Wal-Mart Stores Inc., Cole National Corp., which is in Sears Roebuck & Co. and USV which is in JC Penney Co. Inc. stores.
"If someone were to roll up that sector, it would be a phenomenal story. It's a great opportunity," said Ralph.
The two probable outcomes of USV's look at strategic alternatives would be to go private, or to undergo a merger of equals, added Ralph. A management led-LBO would be difficult, however, as USV does not have much in the way of assets, he said.
"A deal with Cole or a larger buyer would make sense," he said, though pointed out that Sears would get nervous to have management unified with a J.C. Penney-affiliated company. Neither Cole nor Sears returned calls.
Since USV's book value is roughly $6 per share, Ralph said he understood the rejection of Norcross's bid.
For the second quarter, USV earned $1 million on $36 million in revenues, compared with $1.2 million on $35 million in revenues in the second quarter of 1999.
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