Luxottica Buys Brazilian Eyewear Maker

Italian luxury eyewear company Luxottica is moving to buy Brazilian eyewear company Grupo Tecnol, in a deal that gives it a foothold in a growing market. The company, which sells top brands such as Persol, Oliver Peoples and Ray Ban eyewear, will initially buy an 80% stake in Tecnol, with the remaining 20% to be acquired over a period of 4 years at pre-determined prices. The company estimates Tecnol’s enterprise value at EUR110m ($148.1m), but Luxottica officials declined to give additional information about the actual amount of the transaction, its valuation metrics or the advisors involved. The deal is expected to close in early 2012. Brazil’s growing middle class is an attractive client base for luxury brands and the primary reason for Luxottica’s foray into that market. Luxottica estimates that the South American country could soon become one of the top five markets for its wholesale division. Tecnol is a leader in the Brazilian eyewear business with net sales that reached the equivalent of EUR90m ($121.2m) in 2010, a compound growth rate of 14%.