Following the lead of the suppliers they patronize, these buying groups are consolidating while expanding services.
The latest roll-up in the buying group category occurred near the end of last year when a number of prominent eyecare professional (ECP) alliances merged to form Healthy Eyes Advantage. This followed consolidation among other leading organizations, such as in late 2016 when ABB Optical Group acquired Diversified and ECP Network. Also, earlier that year, Essilor bought Opti-Port, which joined Vision Source and PERC/IVA, previously acquired by Essilor.
HEALTHY EYES ADVANTAGE
The latest in this string of roll-ups resulted when middle-market private equity firm Nautic Partners, LLC formed Healthy Eyes Advantage to acquire Block Buying Group, C&E Vision Services, HMI and Vision West. The result is that now Healthy Eyes Advantage provides group purchasing, alliance and other services to over 10,000 independent ECPs. The company is based in San Diego and San Clemente, CA, and Vicksburg, MS.
With more than 100 years of experience serving the independent eyecare channel collectively, the Healthy Eyes Advantage team includes Jeff Rinkus, the former chief operating officer of ABB Optical; Andrew Alcorn, the former chief executive officer of Block Vision and chairman of Superior Vision; and Joseph Mallinger, OD, MBA, FAAO, former chief executive officer of Vision West, past president of the California Optometric Association, and president-elect of Optometry Cares, the AOA’s charitable foundation. In addition to the executive team, Michael Block, founder and CEO of Block Buying Group, and Brad Shapiro, principal of C&E and Vision West, have joined the board of Healthy Eyes and are serving as senior advisors of the company.
“Together, the four buying groups provide purchasing services and management support to more than 10,000 optometrists, ophthalmologists and opticians across the country with over $500 million in purchasing power,” said Rinkus, CEO of Healthy Eyes Advantage. “These numbers give us an opportunity to partner with leading industry suppliers to develop innovative purchasing programs that will further reduce our members’ largest expense, their cost of goods. We will also be building a peer network of independent practitioners to assist with marketing, managed care, staffing, accounting and other practice management challenges.”
This extension of services beyond basic group purchasing functions is a trend that has been occurring across the board among all of these alliances, including those recently consolidated. For example, ABB Optical Group, in addition to offering a more robust list of vendors with deeper discounts in 2018, according to the company, the buying group ranks extremely high in its education efforts as well as its offering of consolidated billing and customer support in providing advice to all sizes of its membership. It will also offer a broader offering of education served up in all formats this year to accommodate members’ busy lifestyles and a host of other new options to be announced.
Opti-Port, which had already developed an extensive suite of member services beyond basic purchasing functions, has also further enhanced them following its acquisition by Essilor. Opti-Port has been able to continue to offer more value-added programs for members, specifically in the patient marketing solutions and technology categories. Examples include the expanded Opti-Port Direct Marketing Program that analyzes, benchmarks and optimizes members’ annual exam recall program process.
In addition, Opti-Port has expanded its digital marketing solutions to offer online reputation management and search engine optimization services. Members now have access to full-service marketing agency offerings that specialize in the eyecare industry. This is all in addition to Opti-Port’s CLX cloud-based contact lens ordering, management and marketing system, which now also offers preferred access to PERC and IVA members and recently added a contact lens subscription module to the already successful automated text and email contact lens reorder campaign and web store. All of this functionality will be available to CLX users in 2018.
“Even with the recent industry consolidation, the U.S. eyecare marketplace continues to be extremely fragmented,” said Erin Meyer, marketing communications manager for Opti-Port. “We see alliances as a much different model than buying groups, and because of the alliances’ tighter influence and engagement with members, this seems an area that has been attractive to both strategic and financial investors.”