Oppenheimer Reiterates Outperform, $90 PT on WellPoint; Acquires 1-800 Contacts
Oppenheimer remains rated Outperform with a $90 PT on WellPoint (NYSE: WLP) as the company acquires 1-800 Contacts
Oppenheimer notes, "WLP has agreed to acquire Draper, UT-based 1-800 Contacts Inc. for approximately $900M, according to the Wall Street Journal. The transaction is expected to be $0.04 dilutive to FY2012 EPS, but accretive beginning in 2014. 1-800 Contacts has roughly 3.3M customers and generated ~$400M in annual revenues, and management expects double-digit EBITDA growth. We view the acquisition favorably, as it diversifies WLP's revenue stream while improving its margins and growth profile. Additionally, potential development/cross-selling of new vision and healthcare plans using 1-800 Contacts' nationally recognized platform could prove to be an attractive growth opportunity."
WLP closed at $90 on Friday.
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