CHARENTON-LE-PONT, France—Following this morning’s announcement of Essilor’s plans to acquire Schweiter Technologies’ Satisloh division, executives from Essilor (ISIN: FR 0000121667) said they plan to leverage the complementary capabilities of the two companies to provide prescription laboratories with a “total solution” for ophthalmic lenses and lens processing equipment while growing the overall market.

Speaking on a conference call with financial analysts, Essilor Group’s chief operating officer Philppe Alfroid said Essilor is buying Satisloh because “our businesses, products and processes are closely linked. New products require new processes which in turn require better machines, and the reverse is also true. We’ll be working closely together, bringing better products to the market, whether to lenscasters, Rx labs or opticians.”

Essilor chairman and president, Xavier Fontanet stressed that Essilor’s major goal is to “grow the industry via the growth of sophisticated products.”

In an exclusive interview with Vision Monday, Fontanet added, “This is a very big move—R&D of Essilor and R&D of Satisloh will generate better machines and products for everybody. If the global market grows even one percent, it has a huge effect on Essilor’s value…We think of Essilor, but we also think of the industry as a whole, because [this combination] is beneficial.”

Alfroid said lab software, consumables and lens finishing equipment are three key areas in which Essilor can use its technology and future R&D collaboration to help Satisloh. He said that Essilor can benefit from Satisloh’s expertise in various areas, citing one example as sputtering technology, an AR technology in which Essilor has limited knowledge.

"We’re making sure, via the structure of their business, that they’ll keep doing business as they have in the past,” Alfroid said in response to an analyst’s question about possible changes. “This would not interfere with any of the transactions they make with direct competitors; Essilor will not have better terms than they have today." Alfroid added, “We are going to enlarge the product. They are number one in grinding and polishing and AR. In between there is hard coating, an area where Essilor has particular knowledge; we’ll be able to open up this new business line for Satisloh. This business can grow also by acquisition and we think there are new opportunities to make Satisloh an even larger player in the equipment industry.

“The full implementation of synergies between the two companies could take a few years,” Alfroid told analysts. [But] we think Essilor can grow the business based on what it is now and for the future. We can grow the business through acquistion, but don’t think we’ll buy an another AR company. We intend to extend the business in areas where they are not now. This could be edging or finishing...and it could be software, which is more and more important to managing labs...Satisloh can be the player to offer a full and complete line of all the products needed to operate a lab.”

Satisloh 's Beat Siegrist, who continues as CEO of Satisloh and takes a seat on Essilor’s executive committee when the deal concludes, told VMail, “As the industry continues to change we feel it is important to align closely with a strong partner, especially for the next generation of innovations. With Essilor’s technology leverage Satisloh will be able to pursue its chosen strategy to serve all Rx labs with best production solutions even more effectively. This is clearly to the benefit of all of our customers. And the synergies between our R&D groups will result in a faster ‘time to market.’”

Larry Clarke, CEO of Satisloh North America, added, “Our local team here in North America will continue to do what we have being doing very successfully for a long time: focusing on the needs of all of our customers. For me personally, I get to keep working for Beat Siegrist who hired me eight years ago and he has shared a very exciting vision for improving the way all lenses are manufactured. We are excited about the possibility of adding new technologies to our ever expanding portfolio of integrated manufacturing solutions and we are sure this increase in options will benefit all customers.”

Satisloh sells to lenscasters, independent labs and integrated retailers. Its sales to Essilor represented about 17 percent of Satisloh's business, according to a financial spokesperson for Essilor on the conference call with analysts earlier today. Major U.S. retailers comprise 15 percent of Satisloh's business; other lenscasters, less than 10 percent while other independent customers (smaller integrated retailers and Rx labs) represent more than 60 percent of their business. About 40 percent of Satisloh’s sales are made in North America, according to the Essilor financial spokesperson.

The deal of €340 million is a mix of cash and debt and represents 16 times the net income of Satisloh in 2007, the Essilor financial spokesperson said during the call. "Satisloh had a great year in 2007, an exceptional year, as some U.S. retailers put in new AR equipment machines; we are not sure if we’ll experience the same level of sales in 2008, [due to] the impact of the U.S. dollar,” the spokesperson added.

For Vision Monday’s complete interview with Essilor’s CEO Fontenet, conducted earlier today, go to the Between the Lines tab on www.visionmonday.com.