January 9, 2014 / 5:10 PM / 4 years ago

RLPC: 1-800 CONTACTS sets $585M LBO financing package

NEW YORK, Jan 9 (Reuters) - Thomas H. Lee Partners is looking for a $585 million financing package backing its leveraged buyout (LBO) of 1-800 CONTACTS, sources told Thomson Reuters LPC.

The loan facilities consist of a $60 million revolving credit, a $400 million first-lien term loan, and a $125 million second-lien term loan.

WellPoint, which owns the company, and 1-800 CONTACTS did not return calls for comment.

The revolver and first-lien loan will be offered to investors at a bank meeting on January 14, the same sources said. The bank meeting has been set for 2 p.m. ET in New York City.

The second-lien term loan will not be offered at the meeting and will be sold privately, sources added.

Goldman Sachs and Morgan Stanley are leading the financing. Obamacare uncertainty

Health-benefit company WellPoint announced Tuesday plans to sell its online contact lens retail subsidiary 1-800 CONTACTS to the private equity firm.

WellPoint said in a press release that proceeds from the sale of 1-800 CONTACTS will support WellPoint’s capital deployment strategies, as the company focuses on core growth opportunities as it prepares for coming changes to the health care system.

WellPoint, which operates Blue Cross Blue Shield in 14 states, is streamlining its business as it faces potential headwinds such as cuts to Medicare reimbursement, and uncertainty related to Affordable Care Act (Obamacare) implementation.

WellPoint also plans to sell glasses.com and its virtual eyewear try-on technology to Luxottica, a Milan, Italy-based luxury and sports eyewear company.

The 1-800 CONTACTS and Luxottica transactions are expected to close in the first quarter of 2014.

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