Bloomberg News

Bausch & Lomb Owner Said to Seek Banks for IPO as Sale Falters

February 22, 2013

Warburg Pincus LLC is interviewing banks for an initial public offering of Bausch & Lomb Inc. after an effort to sell the eye-care company resulted in disappointing bids, said people with knowledge of the matter.

The private-equity firm is soliciting pitches from Bank of America Corp. (BAC:US), Citigroup Inc., Credit Suisse Group AG, and JPMorgan Chase & Co., which financed the firm’s 2007 buyout of Bausch & Lomb, said one of the people, who asked not to be named because the process is private. New York-based Warburg had worked with Goldman Sachs Group Inc. (GS:US) on finding a buyer for the company and had sought at least $10 billion, people familiar with the process said in January. Goldman Sachs will likely work with another bank on the IPO, another person said.

Warburg is pursuing an IPO to exit its investment after private bids came in at less than $9 billion, one of the people said. Additionally, Warburg and Bausch & Lomb have been encouraged by the performance of Zoetis Inc. since its January debut, another person said. Zoetis, Pfizer Inc.’s animal-health unit, raised $2.57 billion in its IPO, pricing the shares above the marketed range, and has climbed 25 percent.

Warburg is weighing how to dispose of the business as it seeks investments for a new fund that documents obtained by Bloomberg News show has a target of $12 billion. Warburg took Bausch & Lomb private in a 2007 deal valued at $4.6 billion, including debt, according to data compiled by Bloomberg.

Contact Lenses

Abbott Laboratories (ABT:US), Johnson & Johnson and Sanofi (SAN) all had shown interest in Bausch & Lomb, whose products include contact lenses and eye-care solutions, people said last month. Merck & Co. and Pfizer also considered offers, these people said.

Adam Grossberg, a spokesman for Bausch & Lomb, and Jeffrey Smith, a spokesman for Warburg, declined to comment on the process. Representatives for Goldman Sachs, Bank of America, Citigroup, JPMorgan and Credit Suisse declined to comment.

A $10 billion sale would give Warburg a more than 200 percent gain on its $1.7 billion equity investment in the 2007 buyout, the people said in January.

Bausch & Lomb has three businesses: pharmaceuticals, vision care and surgical, according to documents provided by the company in December. Pharmaceuticals and vision each account for about 40 percent of sales, with the rest coming from surgical.

Since the buyout, Bausch & Lomb’s earnings before interest, taxes, depreciation and amortization have risen to just under $700 million from about $400 million, people familiar with the company’s financial situation have said. The company projected 2012 Ebitda of more than $700 million and double-digit revenue growth, another person said.

Geographically, about 40 percent of Bausch & Lomb’s sales come from North America, 33 percent from Europe and the rest from Asia or Latin America.

To contact the reporters on this story: Lee Spears in New York at lspears3@bloomberg.net; David Carey in New York at dcarey13@bloomberg.net; David Welch in New York at dwelch12@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net


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