Valeant Buys Bausch & Lomb For $8.7 Billion
Valeant — the Bermuda the Bermuda-domiciled pharmaceuticals group — announced on Monday [May 27] it plans to acquire Bausch & Lomb for $8.7 billion.
The acquisition of the privately held ophthalmology business marks the biggest of the 60 takeovers made by Michael Pearson since he took over the leadership of the company which has its headquarters in Laval, Québec.
This strategy followed by Mr. Pearson of acquisitions fuelled by debt has helped in enhancing the groups share price.
The deal will help in the annual savings of $800 million by 2014 and will start generating cash from the very first year.
As per the deal, speciality pharmaceuticals group Valeant will pay the $4.2 billion outstanding loan of Bausch & Lomb’s. Apart from paying off the loan, Valeant will pay $4.5 billion in cash to the current owners, including private-equity firm Warburg Pincus.
The transaction, which will create an eye care business with revenues of more than $3.5 billion for 2013, will be financed with a debt of $1.5 billion and equity of $2 billion.
Bausch & Lomb will keep its brand and division, and Valeant will appoint Fred Hassan, Bausch & Lomb’s chairman and Dan Wechsler, head of its pharmaceuticals division as the chairman. Also, chief executive Brent Saunders will carry on as an adviser until the deal is concluded.
Mr. Saunders said: “Valeant’s acquisition of our company is a testament to the tremendous value our talented employees have created over the past several years.”
Mr. Pearson said that Bausch & Lomb is a popular name with a specialty in eye care products and a “promising late-stage pipeline” will be a great fit to the company’s ophthalmology business, and we “are strongly committed to continuing to build a sustainable eye health business.” The deal will help Valeant to become a global leader in dermatology and eye health segment he added.
