Bloomberg News

Bausch & Lomb Owner Warburg Said to Choose JPMorgan for IPO

March 01, 2013

Warburg Pincus LLC chose JPMorgan Chase & Co. (JPM:US) to lead an initial public offering of Bausch & Lomb Inc. that would raise as much as $1.5 billion, said people with knowledge of the matter.

The offering would give Bausch & Lomb, whose products include contact lenses and eye-care solutions, an enterprise value of $9 billion to $10 billion, said the people, who asked not to be named because the information hasn’t been publicly disclosed.

Warburg, which bought Bausch & Lomb in a leveraged buyout in 2007, would get a higher valuation for Bausch & Lomb in an IPO than in a private sale, one of the people said. New York- based Warburg has leaned toward taking the company public after private bids came in at less than $9 billion, below the asking price of at least $10 billion, people familiar with the situation said earlier this month.

Underwriters for Bausch & Lomb’s IPO include Bank of America Corp. and Citigroup Inc. (C:US), the people said. Goldman Sachs Group Inc. (GS:US), which Warburg had hired to explore the private sale, will also work on the IPO, the people said. Goldman is still trying to find a buyer though that is less likely now than an offering, said one of these people.

Adam Grossberg, a spokesman for Bausch & Lomb, and Ed Trissel, a spokesman for Warburg, declined to comment. Representatives for JPMorgan, Goldman Sachs, Citigroup and Bank of America declined to comment.

Warburg is disposing of Bausch & Lomb 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 deal valued at $4.6 billion, including debt, according to data compiled by Bloomberg.

Vision Care

A $10 billion sale would have given Warburg a more than 200 percent gain on its $1.7 billion equity investment in the 2007 buyout, people familiar with the matter 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.

To contact the reporters on this story: Lee Spears in New York at lspears3@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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