VALEANT Pharmaceuticals International said yesterday it has agreed to acquire eye care company Bausch & Lomb Holdings from Warburg Pincus for $8.7bn (£5.8bn) in cash.
The deal is expected to transform Valeant into a global leader in eye health by strengthening its capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and ophthalmic surgical devices and instruments.
The deal, to be financed through debt and equity, will see some $4.5bn go to an investor group led by Warburg Pincus, with $4.2bn used to pay down Bausch & Lomb’s outstanding debt.
The deal will be financed with debt and about $1.5bn to $2bn of new equity, said Valeant, which has secured committed debt financing from Goldman Sachs.
Valeant expects the deal to result in at least $800m in annual cost savings by the end of 2014.
Bausch & Lomb is expected to generate revenues of about $3.3bn and adjusted earnings before interest, taxes, depreciation and amortisation of about $720m in 2013.
Quebec-based Valeant said the deal is expected to be immediately accretive to its cash earnings per share.
Valeant has been on the acquisition trail since its 2010 takeover by Biovail, which assumed the Valeant name. Share hit an all-time high on the Toronto Stock exchange yesterday, up 10.2 per cent at C$95.82.
City A.M. Reporter