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Valeant to buy Bausch & Lomb in $8.7B deal

Rochester Business Journal
May 27, 2013

Bausch & Lomb Holdings Inc. has agreed to be acquired by Valeant Pharmaceuticals International Inc. for $8.7 billion in cash.

Laval, Quebec-based Valeant (NYSE: VRX) and Bausch & Lomb announced the definitive agreement today, saying it had been approved unanimously by the board of directors of both companies.

An investor group led by private-equity firm Warburg Pincus LLC will receive roughly $4.5 billion and some $4.2 billion will be used to repay Bausch & Lomb's outstanding debt. Warburg Pincus bought the Rochester business icon for $3.7 billion in September 2007, taking the longtime publicly traded company private.

Bausch & Lomb will keep its name and become a division of Valeant, the companies said. Valeant's existing ophthalmology businesses will become part of the new Bausch & Lomb division, creating a global eye health segment with estimated pro forma 2013 net revenue of more than $3.5 billion.

In an IPO registration statement filed with the Securities and Exchange Commission in March, Bausch & Lomb reported a loss for each of the last three years. Its net losses in 2010-2012 attributable to Bausch & Lomb Holdings were $196 million, $123.9 million and $68.3 million, respectively. Net sales rose from $2.6 billion in 2010 to $3 billion in 2012.

The company filed for the initial public offering after Warburg Pincus reportedly shopped Bausch & Lomb for at least $10 billion without success.

"Valeant's acquisition of our company is a testament to the tremendous value our talented employees have created over the past several years," said Brent Saunders, Bausch & Lomb CEO, in a statement.

After the deal closes, Saunders will join Valeant in an advisory role "to help ensure a seamless transition and integration," the companies said. Bausch & Lomb chairman Fred Hassan will join Valeant's board.

The transaction is expected to close in the third quarter, pending customary regulatory approvals.

Valeant, which plans to borrow $6.7 billion to $7.2 billion to finance the acquisition, expects to achieve at least $800 million in annual cost savings by end of 2014. The companies did not say whether some of those savings would come from cuts to Bausch & Lomb’s current staff.

5/27/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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