Valeant to buy Bausch + Lomb for $8.7 billion

Laval, Quebec and Rochester, NY-Valeant Pharmaceuticals International Inc. and Bausch + Lomb Holdings Inc. have entered into a definitive agreement, under which Valeant will acquire Bausch + Lomb.

Under terms of the agreement, Valeant will pay aggregate consideration of $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. Valeant expects to achieve at least $800 million in annual cost savings by the end of 2014. Bausch + Lomb expects to have revenues of about $3.3 billion and adjusted EBITDA in 2013 of about $720 million.

Bausch + Lomb will retain its name and become a division of Valeant. Valeant’s existing ophthalmology businesses will be integrated into the Bausch + Lomb division, creating a global eye health platform with estimated pro forma 2013 net revenue of more than $3.5 billion.

“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,” said J. Michael Pearson, Valeant’s chairman and chief executive officer (CEO), in a prepared statement. “With this transaction, Valeant will be a worldwide leader in both dermatology and eye health.”

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

Following the closing, Saunders will join Valeant in an advisory role to help ensure a seamless transition and integration. Fred Hassan, chairman of Bausch + Lomb’s Board of Directors, will join Valeant’s Board of Directors.

In addition, Dan Wechsler, executive vice president and president of Bausch + Lomb’s global pharmaceuticals, will join Valeant as executive vice president and company group chairman, ophthalmology and eye health. Calvin W. Roberts, MD, Bausch + Lomb’s chief medical officer, will also join Valeant as its chief medical officer, ophthalmology and eye health.

The transaction is expected to close in the third quarter, according to the statement.

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