Luxottica Group S.p.A. and Grupo Tecnol Ltda, a leading Brazilian eyewear player, have signed an agreement pursuant to which Luxottica will acquire 100% of Grupo Tecnol capital. As a result of this acquisition, Luxottica will significantly strengthen its presence in Brazil, a country with significant growth potential. Utilizing Tecnol’s excellent, vertically integrated platform will allow Luxottica to increase service levels to customers and its presence in the Brazilian market. Tecnol has a highly efficient production plant, a portfolio comprising both house and licensed brands, strong wholesale distribution activities, an optical retail chain of 90 stores and a central, leading-edge, laboratory.
“This operation perfectly fits into our long-term growth strategy,” commented Andrea Guerra, Chief Executive Officer of Luxottica. “Brazil is one of the countries where Luxottica aims at being as “domestic” as it is in Italy, where it was established 50 years ago, having deep local roots and investing in people, activities and culture. Tecnol is the best possible partner for us to strengthen our presence in Brazil and in Latin America as a whole, as it has the same vision, the same approach to excellence in serving consumers and the same vertically integrated business model.”
The acquisition of Tecnol will allow Luxottica to materially increase service levels to its Brazilian customers, bringing them the same standards of excellence offered in countries like Italy, France and the United States. This transaction will allow Luxottica to source product locally minimizing many of the costs and complexities currently faced by Luxottica in importing the company's brands into Brazil. This will result in an ability to reduce the time required to deliver products to customers by two thirds and create other synergies for this business.
Tecnol’s business model fits perfectly into Luxottica’s strategy of increasing its presence in the optical business, which is expected to grow globally over the next few years. Tecnol provides an ideal platform for enhancing Luxottica’s optical business and, more generally, will be a springboard for its other activities in Latin America.
Tecnol’s brand portfolio complements Luxottica’s and includes both house brands – including Platini, Jean Monnier and Tecnol – and licensed brands for the Brazilian market. Tecnol’s wholesale distribution activities cover approximately 15,000 doors in Brazil through a network of distributors and representatives.
Grupo Tecnol also has a leading-edge central laboratory, which is able to efficiently deliver frames and lenses, and a retail optical chain of 90 stores in the state of San Paolo under the name Oticas Iris.
The acquisition is expected to close by the beginning of 2012. Under the terms of the purchase agreement, Luxottica will initially acquire 80% of Grupo Tecnol capital with the remaining 20% purchased over the next 4 years – 5% per year - at pre-determined prices. The enterprise value of Tecnol is approximately 110 million Euros.