Valeant Pharmaceuticals International Inc. is acquiring Bausch+Lomb Holdings Inc. for $8.7 billion in cash.

Valeant Pharmaceuticals, Bausch+Lomb, acquisition, eye health, ophthalmology, ophthalmic pharmaceuticals, contact lenses, lens care, eye health products, Micheal Pearson, Brent Saunders

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Valeant to buy Bausch+Lomb for $8.7 billion

May 28th, 2013

LAVAL, Quebec, and ROCHESTER, N.Y. – Valeant Pharmaceuticals International Inc. is acquiring Bausch+Lomb Holdings Inc. for $8.7 billion in cash.

With the deal, announced on Monday, Bausch+Lomb will retain its name and become a division of Valeant. Meanwhile, Valeant's ophthalmology businesses will be integrated into the Bausch+Lomb division.

The move will create a global eye health platform with estimated pro forma 2013 net revenue of more than $3.5 billion, according to the companies. Valeant said the acquisition positions it to capitalize on rising eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets. The combined business will also benefit from access to a strong product portfolio and a late-stage pipeline of innovative products.

"We are excited to announce the acquisition of Bausch+Lomb, which will transform Valeant into a global leader in eye health by significantly strengthening our capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and ophthalmic surgical devices and instruments," Michael Pearson, chairman and chief executive officer of Valeant, said in a statement. "Bausch+Lomb's world-renowned brand, comprehensive portfolio of leading eye care products and promising late stage pipeline are an ideal strategic fit for our current ophthalmology business, and we are strongly committed to continuing to build a sustainable eye health business.

"With this transaction, Valeant will be a worldwide leader in both dermatology and eye health," he added.

Bausch+Lomb's eye health offerings span three segments: pharmaceutical (including prescription brands, generics and over the counter), vision care (contact lenses and solutions), and surgical (intraocular lenses and surgical equipment). Its eye health products include the prescription and OTC brands Besivance, Lotemax, Ocuvite and PreserVision; vision care brands Biotrue ONEday, PureVision, renu and Boston; and surgical brands enVista, Storz, Stellaris and VICTUS. The company's 2013 revenue is estimated at $3.3 billion.

"Bausch+Lomb has undergone a profound transformation over the last few years," stated Brent Saunders, CEO of Bausch+Lomb. "We introduced innovative new products for patients, built a robust pipeline, expanded into new markets and strengthened our relationships with eye care professionals around the world. Valeant's acquisition of our company is a testament to the tremendous value our talented employees have created over the past several years. Our companies have a shared commitment to providing innovative and high-quality products and exceptional service to customers. I am confident that under their stewardship, the Bausch+Lomb brand will continue to stand for excellence and innovation in eye health."

The boards of both companies have unanimously approved the agreement, which is expected to close in the third quarter, pending customary closing conditions and regulatory approvals.

Under the transaction, Valeant will pay $8.7 billion in cash, of which about $4.5 billion will go to an investor group led by Warburg Pincus and about $4.2 billion will be used to repay Bausch+Lomb's outstanding debt. 

Plans call for Saunders, after the deal closes, to join Valeant in an advisory role to help ensure a seamless transition and integration and for Fred Hassan, Bausch+Lomb's chairman, to join Valeant's board.

In addition, Dan Wechsler, executive vice president and president of Bausch+Lomb's global pharmaceuticals, is slated to join Valeant as executive vice president and company group chairman of ophthalmology and eye health. Calvin Roberts, Bausch+Lomb's chief medical officer, also is slated to join Valeant as its chief medical officer for ophthalmology and eye health. Other members of Bausch+Lomb's also senior management team also are expected to join Valeant.