Valeant to acquire Bausch + Lomb

LAVAL, Quebec—Valeant Pharmaceuticals International, Inc.,along with Bausch + Lomb Holdings Inc., has announced the establishment of adefinitive agreement for Valeant to acquire Bausch + Lomb for $8.7 billion.Both companies' boards of directors have unanimously approved the transaction.

Per the terms of the agreement, Valeant will pay $8.7billion in cash for Bausch + Lomb, roughly $4.5 billion of which will go to aninvestor group led by Warburg Pincus, with the approximately $4.2 billionremaining to be used to repay Bausch + Lomb's outstanding debt. Valeant will befinancing the transaction with debt and approximately $1.5 billion to $2billion of new equity, having secured fully committed debt financing fromGoldman Sachs Bank USA.

"We are excited to announce the acquisition of Bausch +Lomb, which will transform Valeant into a global leader in eye health bysignificantly strengthening our capabilities in ophthalmic pharmaceuticals,contact lenses and lens care products, and ophthalmic surgical devices andinstruments," J. Michael Pearson, chairman and CEO of Valeant, said in a pressrelease. "Bausch + Lomb's world-renowned brand, comprehensive portfolio ofleading eye care products and promising late-stage pipeline are an idealstrategic fit for our current ophthalmology business, and we are stronglycommitted to continuing to build a sustainable eye health business. With thistransaction, Valeant will be a worldwide leader in both dermatology and eyehealth."

Following the closing of the transaction, Bausch + Lomb willkeep its name, becoming a division of Valeant, which will integrate itsexisting ophthalmology business into the Bausch + Lomb division. The combinedeye health platform will have estimated pro forma net revenue for 2013 of morethan $3.5 billion.

Bausch + Lomb will bolster Valeant's ophthalmology portfoliowith a strong brand history and a presence in pharmaceuticals, includingprescription brands, generics and over-the-counter products; vision care,including contact lenses and solutions; and surgical, including intraocularlenses and surgical equipment. Valeant expects the transaction to beimmediately accretive to its earnings per share, and forecasts annual costsavings of at least $800 million by the end of 2014. Bausch + Lomb is expectedto see revenues of roughly $3.3 billion in 2013, with adjusted EBITDA ofapproximately $720 million.

"Bausch + Lomb has undergone a profound transformation overthe last few years. We introduced innovative new products for patients, built arobust pipeline, expanded into new markets and strengthened our relationshipswith eye care professionals around the world," Brent Saunders, CEO of Bausch +Lomb, commented in a statement. "Valeant's acquisition of our company is atestament to the tremendous value our talented employees have created over thepast several years. Our companies have a shared commitment to providinginnovative and high-quality products and exceptional service to customers. I amconfident that under their stewardship, the Bausch + Lomb brand will continueto stand for excellence and innovation in eye health."

The transaction is subject to customary closing conditionsand regulatory approvals, and is expected to close in the third quarter of thisyear.

Valeant brought on Skadden, Arps, Slate, Meagher & FlomLLP and Osler, Hoskin & Harcourt LLP as its legal counsel for thistransaction. Bausch + Lomb enlisted Cleary Gottlieb Steen & Hamilton LLPfor legal counsel, with Goldman, Sachs & Co. and J. P. Morgan SecuritiesLLC serving as its financial advisors.

SOURCE: Valeant Pharmaceuticals International, Inc. press release