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WellPoint to Acquire 1-800 CONTACS Inc. (WLP)

WellPoint Inc. (NYSE: WLP), a health benefit company, on Monday announced that it agreed to acquire 1-800 CONTACTS Inc., a leading online retailer of contact lenses in the U.S. The acquisition of 1-800 CONTACTS advances WLP’s growth strategy and also enhances the company’s ability to build direct-to-consumer relationships.

1-800 CONTACTS provides consumers an easy and affordable way to buy contact lenses through its toll-free telephone number and its website. The company serves nearly 3.3 million customers.

WellPoint did not disclose the financial terms of the acquisition. The transaction is expected to be completed in the third quarter of 2012 and will be funded from available cash on hand. WLP expects the acquisition to be slightly dilutive to earnings per share in 2012.

Angela F. Braly, President and CEO of WellPoint, said that the acquisition strategically aligns with WLP’s efforts to capitalize on new opportunities for growth and further diversifies the company’s revenue stream into the complementary and higher-margin eyewear business.

Braly noted that 1-800 CONTACTS has rapidly expanded through exceptional brand recognition, convenient customer service and an industry-leading direct-to-consumer model. Braly believes these assets will drive continued strong future growth in the eyewear marketplace and also significantly enhance WLP’s efforts to build trusted relationships with consumers across the entire country.

WellPoint shares fell slightly in trading on Monday. The stock ended the day 1.37% lower at $65.45.

Year-to-date, WLP shares have fallen 1.21%, compared with a gain of 1.63% for the S&P 500.


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