Mr. Roger Hardy reports

ESSILOR INTERNATIONAL AGREES TO ACQUIRE COASTAL.COM FOR $430 MILLION

Coastal Contacts Inc. has entered into an acquisition agreement with Essilor International under which Essilor has agreed to acquire all of the issued and outstanding common shares of Coastal for a purchase price of $12.45 per share, representing a net equity value of approximately $430-million.

The purchase price per share represents a premium of 43 per cent over the three-month volume-weighted average price of $8.73 on the Toronto Stock Exchange and 84 per cent over the six-month volume-weighted average price of $6.78.

"Essilor shares Coastal.com's focus on customers, innovation and growth," said Roger Hardy, Coastal's founder and chief executive officer. "The combination will enhance Coastal.com's ability to achieve its goals while realizing a significant all-cash premium for our shareholders. I am confident this transaction is the right decision for Coastal.com, our employees and our shareholders."

The transaction will be implemented by way of a statutory plan of arrangement and is subject to customary closing conditions, including approval by shareholders, court approval and regulatory approval. Assuming the timely receipt of such approvals, the transaction is expected to close in the second quarter of 2014.

The board of directors of Coastal, acting on the recommendation of its independent special committee and after consultation with its legal and financial advisers, unanimously approved the acquisition agreement and recommend that shareholders of Coastal vote their common shares in favour of the arrangement. Members of the board and officers of Coastal collectively holding over 16 per cent of the outstanding common shares of Coastal have also entered into support and voting agreements with Essilor.

The acquisition agreement provides for a customary non-solicitation covenant on the part of Coastal and, in the event of a superior proposal, Essilor has the right to either match the superior proposal or receive a termination fee in the amount of $16-million.

Further details regarding the terms of the arrangement are set out in the acquisition agreement, which will be publicly filed by Coastal with the Canadian securities regulatory authorities on SEDAR and with the U.S. Securities and Exchange Commission on EDGAR. In addition, details of the arrangement, including a summary of the terms and conditions of the acquisition agreement, will be disclosed in a management information circular of Coastal, which will be mailed to shareholders and will also be available on SEDAR and EDGAR. Shareholders are urged to carefully read the information circular once it becomes available.

Financial and legal advisers

Guggenheim Securities LLC acted as lead financial adviser and Roth Capital Partners as co-financial adviser, and McCarthy Tetrault LLP is acting as legal adviser to Coastal in connection with the transaction. Neal, Gerber & Eisenberg LLP is acting as special U.S. counsel to Coastal. BMO Capital Markets is acting as financial adviser, and Blake, Cassels & Graydon LLP is acting as legal adviser to the special committee.

We seek Safe Harbor.