Based in France, Essilor International is the world's largest manufacturer of ophthalmic lenses, and it has been investing strongly in sun lenses lately, as reported in one of our sister publications, Eyewear Intelligence. Based in Lincoln, Rhode Island, Costa Inc. is the marketer of Costa and Native sunglasses, which are currently sold mostly in the southeastern part of the U.S. for fishing, mountaineering and other outdoor sports. Costa sunglasses are also sold in Europe, mostly in the sports fishing community, but the company has been looking lately for a diversification of its distribution in the region.

Today, Essilor announced an agreement for the acquisition of all the shares of Costa Inc., which is trading on the Nasdaq stock exchange. Costa Inc. was previously the eyewear division of a larger company, A.T. Cross, which completed last September the sale of its Cross pen business to an investment company for $60 million. A.T. Cross had purchased Costa in 2003 and Native in 2008, and these two brands accounted for 46 percent of its revenues in 2012, rising by 14 percent to $83.3 million and generating 24 percent higher operating income of $13.4 million as compared to the levels of the previous year.

Costa Inc. is expected to report revenues of about $100 million from continuing operations in 2013, said Essilor. Essilor will pay $21.50 a share in cash for its business, representing a 19 percent premium over the average weighted share price of the past six months and giving the company an enterprise value of about $270 million including debt. Shareholders representing about 34 percent of Costa's equity have agreed to vote in favor of the transaction at a forthcoming extraordinary shareholders' meeting.

The transaction is expected to close in early 2014, subject to regulatory approvals and endorsement by a majority of Costa's shareholders. Essilor says that it will be accretive to its own earnings per share in 2014, excluding the impact of the purchase price allocation, and fully accretive in 2015. It will be financed out of Essilor's large cash reserves.

Under the ownership of Essilor, Costa intends to accelerate its geographic expansion in other parts of the U.S. and internationally. It will also work together with Essilor to broaden product offerings in the prescription eyewear segment. It will leverage Essilor's expertise in surface coatings for lenses including anti-fog and hydrophobic applications.

Sun lenses account today for only 5 percent of Essilor's revenues, but the company has been investing heavily in this sector, whose growth is about twice as fast as the 5 to 6 percent annual growth of the clear ophthalmic lens market. It bought a couple of years ago Stylemark, a big American supplier of sunglasses and readers. More recently, it signed a license for Polaroid branded sun lenses and agreed to take over Transitions, the world's largest supplier of photochromic lenses, and NXT, an Italian supplier of very robust sun lenses.

Essilor claims claims that Costa has become the fastest-growing brand of performance sunglasses in the U.S. thanks to the superior clarity of its polarized lenses, made a facility in Florida. Its patented 580 lens technology offers color enhancement and increased visual acuity.

Native eyewear is intended primarily for mountaineering activities. Costa, which is also known as Costa del Mar, is mainly intended for use in connection with water sports such as fishing, sailing and surfing. The latter was founded in 1983 as a nature sanctuary was asked to make a donation of polarized sunglasses. Costa has been diversifying recently into sports apparel and other products.