Case Study - Eye Care Centres of America
Background
- ECCA is a significant spectacle seller throughout the USA.
- Brands include: EyeMasters, Binyon’s, Visionworks, Hour Eyes, Dr. Stein Optical, Vision World and Eye DRX.
- 49% ownership was by Golden Gate Capital and 51% owned by Moulin Global Eyecare Holdings.
- Moulin Global Eyecare Holdings was facing financial difficulties ECCA needed to be realised shortly after its purchase.
- Various contractual provisions in favour of Golden Gate Capital enabled them to have significant control of the assets.
- Despite Moulin’s desire to realise the asset, Golden Gate didn’t consent.
- Appointed to realise the asset for Moulin Global Eyecare Holdings.
Strategy
- Appointed to the board of ECCA.
- Conduct a thorough examination of the contractual position of the parties.
- Stabilise ECCA’s bankers so that operations continued normally.
- Ensured that there was no default in banking facilities.
- Examine potential buyers for the asset and undertook a soft sell process.
- Preparation of information memorandum.
- After thorough analysis of the market, key likely buyers were identified and approached. FAR convinced Golden Gate to sell their interest.
- Devised a court approved process to sell the asset.
Results
- Reassured direct lenders and stakeholders throughout the sale period.
- Within nine months ECCA was sold at nearly double the purchase price.
- The minority shareholder, Golden Gate Capital, invested USD$87 million and recovered USD$130 million.
- Moulin Global Eyecare Holdings investment was doubled.
- The operations of ECCA operated seamlessly and successfully during a period of uncertainty.