Valeant seals Bausch & Lomb deal for $8.7 b

Valeant Pharmaceuticals International said on Monday it has agreed to acquire eye care company Bausch & Lomb Holdings Inc from Warburg Pincus LLC for $8.7 billion 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 $4.5 billion go to an investor group led by Warburg Pincus LLC, with some $4.2 billion used to pay down Bausch & Lomb's outstanding debt.

The deal will be financed with debt and about $1.5 billion to $2.0 billion of new equity, said Valeant, which has secured committed debt financing from Goldman Sachs.

Valeant expects the deal to result in at least $800 million in annual cost savings by end of 2014. Bausch + Lomb is expected to generate revenues of about $3.3 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of about $720 million in 2013.

Laval, Quebec, Canada-based Valeant said the deal is expected to be immediately accretive to its cash earnings per share.