INDIANAPOLIS (AP) — WellPoint Inc. plans to buy contact lens retailer 1-800-Contacts Inc. in a deal that would give the insurer its first direct-to-consumer business outside selling individual health coverage.
Terms of the deal with private equity firm Fenway Partners were not disclosed.
WellPoint, based in Indianapolis, said Monday that the eyewear company will help diversify its revenue sources with a high-margin business. The insurer typically generates an after-tax profit margin of around 4 percent. 1-800 Contacts can generate margins in the double-digit range, said Ken Goulet, WellPoint's president of commercial and specialty companies.
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