American health insurer WellPoint Inc. on Tuesday said it reached an agreement to sell 1-800 Contacts to private equity firm Thomas H. Lee Partners LP. WellPoint is exiting its online contact lens business to focus on its core insurance business.
According to Reuters, WellPoint did not disclose the financial terms of the deal. The health insurer, however, said that it would take an impairment charge related to the sales. This is an indication that WellPoint is selling the business for less than it paid for it.
WellPoint's acquisition of the retail contact lens business from a different private equity firm in June 2012 was one of the last big deals by its chief executive Angela Brawly. The deal was met with mostly negative response from Wall Street analysts at the time, the report said.
WellPoint was widely reported to have paid about $900 million for the business, although the company neever disclosed the purchase price, Reuters said.
The health insurer expectes the deal to close in the current quarter. Proceeds from the transaction will be used to support WellPoint's continued capital deployment strategies, the report said.
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