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January 08, 2014 at 06:41 AM
(Bloomberg) — WellPoint Inc. (NYSE:WLP) agreed to sell online contact-lens site 1-800-Contacts to private equity firm Thomas H. Lee Partners LP to focus on building its insurance business with the start of Obamacare’s expanded coverage.
Financial terms weren’t disclosed. The sale will result in a charge of 52 cents to 57 cents a share for the fourth quarter of 2013, Indianapolis-based WellPoint said yesterday in a statement.
WellPoint also plans to sell Glasses.com, part of the contact-lens retail operation, to Luxottica Group SpA.
WellPoint, the second-largest U.S. health insurer, is gearing up for the millions of people who obtained medical coverage for 2014 through the government marketplaces set up by the Patient Protection and Affordable Care Act (PPACA). The 1-800- Contacts sale will raise money for WellPoint’s main business, Chief Executive Officer Joseph Swedish said in the statement.
“Unlike peers that are moving towards diversification and vertical integration, WellPoint’s new CEO is focusing on streamlining operations and growing in the commercial segment through the health insurance exchanges,” Sarah James, a Wedbush Securities Inc. analyst in Los Angeles, said in a note.
WellPoint’s charge against its earnings for the sale may be as much as $168 million, based on 295.4 million shares outstanding, according to data compiled by Bloomberg.
WellPoint rose less than 1 percent to $91.37 at 10 a.m. in New York. The stock gained 52 percent last year.
