Inspecs buys German eyewear firm for £85m

Eyewear maker Inspecs said it was buying German rival Eschenbach for €94.8m (£85m) as it looks to become a major player on the global market.

The deal will be part-funded through a £64m share placing at 210p a share, Inspecs said on Thursday, with a further £11.3m from cash reserves and £13.5m in bank lending making up the balance.

Based in Nuremberg, Eschenbach has two divisions, one focused on designing and distributing glasses frames while the other designs, makes and distributes specialist optics products.

Eschenbach has an established presence in the US and continental Europe, particularly Germany and France, alongside its portfolio of more than 15 'in house' and licensed brands, Inspecs said on Thursday.

"As a high-quality business with a strong management team and track record of margin-accretive growth, Eschenbach represents the ideal fit for Inspecs," said chief executive Robin Totterman.

“Moreover, it will enable the group to penetrate key global markets, broaden our customer reach, strengthen our brand portfolio and capitalise on the compelling structural opportunities that exist in the fragmented global eyewear market.”

Inspecs said trading since June 30 had been in line with expectations as the order book continued to grow during October. Opticians had remained open, despite the reintroduction of Covid-19 restrictions.

“Factory production has steadily increased from a low in early 2020 and the recent production rate at the factory in Vietnam was in line with the previous year. The recently completed adjacent factory in Vietnam is expected to start production in the first quarter of 2021,” the company said.

It added that a new 'house brand' made from fully sustainable and recycled materials was due to be launched next year. Investments in both the digital B2B platform launch and July's £2.4m acquisition of collapsed eyewear firm Norville had seen "encouraging" results.

Logistical and production efficiencies implemented at Norville had led to the business providing a positive core earnings contribution to the group in its first few months since acquisition in July 2020.

"The Norville acquisition also allows the company to provide an integrated lens and frame offering to customers that is targeted for launch in 2021," Inspecs said.