Reuters: Mergers News: WellPoint To buy 1-800 Contacts for $900 mln-WSJ

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WellPoint To buy 1-800 Contacts for $900 mln-WSJ Jun 4th 2012, 07:31 June 4 | Mon Jun 4, 2012 3:31am EDT June 4 (Reuters) - Health insurer WellPoint Inc plans to buy contact-lens and eyewear retailer 1-800 Contacts Inc for a transaction value close to $900 million, the Wall Street Journal reported, citing a person familiar with the matter. The deal will close in the third quarter and will start adding to the company's per-share earnings in 2014, the Journal said in its report. The deal will be financed with cash on hand, the report said. "We see a unique way of tying 1-800 Contacts into our product design," WellPoint Chief Financial Officer Wayne DeVeydt is quoted as saying in the report. WellPoint would also get "a diversified revenue stream into a higher-margin business," the report said, quoting the CFO. 1-800 Contacts has after-tax margins in the "double digit range," compared with around 4 percent to 5 percent across WellPoint's health-insurance business lines, the report quoted DeVeydt as saying. WellPoint and 1-800 Contacts Inc could not reached for comments by Reuters.

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