What began as an online contact lens shop in a basement 14 years ago has turned into a lucrative international deal for Coastal Contacts Inc. founder Roger Hardy.
The Vancouver-based e-commerce company has reached a friendly $435-million pact to sell itself to Essilor International SA.
Coastal, which operates in Canada as Clearly Contacts, said Thursday that Paris-based Essilor is offering $12.45 a share in cash for the company launched by Mr. Hardy in 2000.
Coastal's chairman and chief executive officer began the business by selling contact lenses online and then diversified into eyeglasses in 2009. He said Essilor, the world's largest maker of corrective lenses, will continue the emphasis on customers, innovation and growth.
Mr. Hardy, 44, started Coastal in a Vancouver basement with a slow-speed Internet connection and maxed-out credit line. "We had a 14K modem, an IBM 386, a Visa card with $5,000 max and a ping pong table. And it's played out okay," he said in an interview.
Mr. Hardy recently controlled roughly 3.3 million shares, making that stake worth $41-million. He also holds options to buy another 882,500 shares.
Last month, Coastal had 32.8 million common shares outstanding and options to purchase nearly 2.3 million common shares.
Mr. Hardy hired Gary Collins, who served as B.C Finance Minister from 2001-04, as Coastal's president in August, 2012.
The company, which has a Swedish subsidiary, employs 750 people worldwide. Customers order from places such as North America, Australia, New Zealand and Brazil.
In Canada, Coastal is experimenting with the traditional storefront format, running two outlets in Vancouver and one in Toronto under the Clearly Contacts brand name. Another seven storefront outlets are planned in Canada, but online retailing remains the focus.
The Internet has played a crucial role in making it convenient to deliver vision care to consumers, said Essilor chairman and CEO Hubert Sagnières.
Coastal's board of directors unanimously recommended acceptance of Essilor's offer, to be completed through a plan of arrangement by the end of April.
Officers and directors hold more than 16 per cent of Coastal. Mr. Hardy's sister, Michaela Tokarski, the founder of Ottawa-based Creekside Communications, is a director. She recently controlled 845,500 shares – now worth $10.5-million, based on the transaction with the French optical giant.
Essilor first approached Coastal about doing a deal last fall, when the Canadian firm's stock traded around $7 a share. The stock has rallied over the past six months, and jumped 20 per cent on Thursday.