Another big Utah deal: 1-800 Contacts sold to KKR & Co. for more than $3B

Orem-based 1-800 Contacts, the nation’s largest retailer of contact lenses, is being sold to global investment firm KKR & Co. Inc. of New York City. Bloomberg reported that KKR will pay current owner AEA Investors, also of New York City, in excess of $3 billion for the brand. AEA purchased 1-800 Contacts in 2016 from Thomas H. Lee Partners.

Started in a dorm room in Utah County in 1995 by Brigham Young University student Jonathan C. Coon and optometrist John F. Nichols, 1-800 Contacts sells eye wear and contact lenses online. The company held an IPO in 1998 on NASDAQ and acquired Lens Express in 2002.

One of the first direct-to-consumer brands, 1-800 Contacts is no longer just a contact lens retailer. The company has expanded its offerings though major technology innovations, launching new companies including an online glasses company, Liingo Eyewear, and lens replacement service Boomerang Lenses. 1-800 Contacts also offers eye examination apps ExpressExam and Rx Reader.

The company has continued its solid growth despite the global COVID-19 pandemic. The company reports a 200 percent to 700 percent increase in usage of telemed apps compared to previous years and a 100 percent increase in new and returning customers. To keep up with the demand, 1-800 Contacts have recently added more than 200 new hires in its Utah and North Carolina operations, bringing its total workforce to over 1,400.

“1-800 Contacts was founded 25 years ago to offer consumers a better way to buy contact lenses. Since the very beginning, we’ve kept the customer at the center of everything we do,” said John Graham, CEO of 1-800 Contacts. “It’s gratifying that KKR sees such incredible value in our brand and that they will continue to support us in doing what we do best — delivering the best vision care to consumers with the highest-quality customer service.”

Nate Taylor, partner and co-head of Americas Private Equity at KKR, said, “1-800 Contacts is a customer-centric, technology-enabled business that is bringing more convenience to the optical space. We are excited to invest behind John and his world-class team.”

Felix Gernburd, KKR managing director, added, “We believe 1-800 Contacts’ singular focus on providing a consistent and high-quality customer experience, fueled by industry-leading capabilities and telemedicine solutions, positions them well to continue to drive innovation in the category.”

KKR is making the investment through its Core Investments strategy, which represents capital that is targeting longer-term opportunities.