B+L acquired by Valeant for $8.7 billion

Laval, Quebec and Rochester, NY -Valeant Pharmaceuticals International, Inc. and Bausch + Lomb Holdings Incorporated announced that they have entered into a definitive agreement under which Valeant will acquire B+L for $8.7 billion in cash. B+L will retain its name and become a division of Valeant. The transaction is expected to close in the third quarter and is subject to regulatory approvals. 

Under terms of the agreement, Valeant will pay $8.7 billion in cash, of which approximately $4.5 billion will go to an investor group led by Warburg Pincus, and approximately $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 end of 2014. B+L expects to have revenues of approximately $3.3 billion and adjusted EBITDA in 2013 of approximately $720 million.

The transaction will be financed with debt and approximately $1.5 - $2.0 billion of new equity. Valeant has secured fully committed debt financing for the transaction from Goldman Sachs Bank USA. Taking into account the anticipated equity raise, Valeant’s debt to pro forma adjusted EBITDA ratio will be approximately 4.6 times.

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. The acquisition positions Valeant to capitalize on growing 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, new products.