Coastal Contacts Inc., a web-only retailer that sells contact lenses and eyeglasses at Coastal.com, is about to be under new ownership.

This morning, Coastal, No. 123 in the 2013 Internet Retailer Top 500 Guide, signed a tentative deal to be acquired for about $385.7 million (C$430 million) by Essilor International, a Paris-based manufacturer and marketer of eyewear and related products.

Under the terms of the deal, Essilor will pay about $11.16 (C$12.45) per share to acquire all outstanding shares of Coastal, which is based in Vancouver.

The deal, which is subject to regulatory approval in Canada and France, is expected to be complete by the end of June. “Essilor shares Coastal.com’s focus on customers, innovation and growth”, says Coastal CEO Roger Hardy. “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 deal has been approved by both boards of directors, Coastal says.

Essilor designs and manufactures eyewear sold under such brand names as Varilux, Crizal, Definity, Xperio, Optifog, Foster Grant, Bolon and Costa. It also develops and markets equipment, instruments and services for eye care professionals.

Essilor reported consolidated revenue of over $6.85 billion (5 billion euros) in 2013 and employs more than 55,000 people. It operates in some 100 countries with 28 plants, more than 450 prescription laboratories and edging facilities, as well as several research and development centers around the world, the company says.

Coastal Contacts, which began selling online in 2000, generated total revenue of $195.2 million (C$217.6 million) in 2013, up 11.0% from $175.9 million (C$196.1 million) in 2012.

This transaction suggests some other web-only retailers may be undervalued by the stock market, says Matt Nemer, an analyst at Wells Fargo Securities. He says the deal is an unusual example of a publicly traded company buying a publicly traded e-retailer, and thus provides a rare opportunity to assess the value of a web-only retailer. In this case, Nemer says, Essilor paid 1.6 times trailing 12-month sales, a higher value than Wall Street is assigning to other e-retailers. For example, he says, online-only jewelry retailer Blue Nile Inc. is trading at only 0.8 times trailing 12-month sales.

“In our view this transaction highlights the value in our profitable pure-play small -cap e-commerce retailers under coverage,” Nemer writes in a note to clients. Besides Blue Nile he points to the digital assets of Liberty Interactive Corp. as another stock that could be worth more than its current market value, based on the Coastal acquisition.

Liberty Interactive is No. 5 in the Top 500 and Blue Nile No. 74.

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