Frame-n-Lens Optical Inc., California's largest eyewear chain, has agreed to be acquired by National Vision Associates for $37 million in cash and assumed debt.
The proposed acquisition of Fullerton-based Frame-n-Lens, which operates 209 stores, will boost National's operations to 715 stores across the country, making the company the third-largest eyewear retailer behind only Cole Vision Corp., which operates Pearle Vision and Sears Optical stores, and LensCrafters.
Lawrenceville, Ga.-based National Vision currently is the fifth-largest optical retailer in the U.S.
Privately owned Frame-n-Lens will become a division of National, but will continue to operate under its own name, the companies said Wednesday.
Some layoffs may occur at Frame-n-Lens to eliminate overlapping jobs after the acquisition, President Michael Collins said. Less than 5% of the company's 1,200 employees would be affected, he added.
Collins said he will assist in the merger, but that a long-term role for him has not been worked out.
Analysts said the move makes sense because the companies are similar--offering low-priced products and operating stores within larger retailers. Frame-n-Lens has 123 outlets in Sam's Club stores, for example, and National Vision has about 360 vision centers in Wal-Mart stores.
The deal, which is expected to close within 60 days, is part of an effort by National to move away from its heavy reliance on leases with Wal-Mart. Leases for some of those National units expire within the next five years, and there is no guarantee that the nation's largest retailer will renew them, analysts said.
Shares of National Vision Associates rose 31 cents to $6.56 in Nasdaq trading.