Pharmaceutical company Bausch Health Companies Inc. BHC-T completes sale of stake in eye care division Bausch + Lomb Corp. through a US$788 million initial public offering, a major step towards unwinding management’s acquisition spree.
This week, the Laval, Que., company expects to sell about 10% of its eye care business at between US$21 and US$24 per share. A successful Bausch + Lomb listing on the Toronto and New York stock exchanges in the middle of that range – US$22.50 per share – would be considered the largest TSX IPO and the second NYSE IPO to date. now this year.
Bausch + Lomb sells over 400 products in over 100 countries and will have a market capitalization of approximately $8.2 billion. In a report on Monday, IPO-focused investment bank Renaissance Capital said: “Despite facing significant competition from other brands and generics, the company is very profitable with a flow strong cash flow and enjoys a global reputation.”
Bausch Health was formerly called Valeant Pharmaceuticals International Inc., and former chief executive Michael Pearson acquired Bausch + Lomb in 2013 for US$8.7 billion, one of a series of acquisitions largely financed by the debt. Valeant then faced regulatory investigations into its business practices, including price hikes on its drugs, and Mr Pearson left in 2016.
A few months later, Joseph Papa took over as CEO of Bausch Health and prioritized paying down debt and focusing the company on a stable of pharmaceuticals. In addition to an IPO in the eye care unit, Bausch Health is in the process of spun off skin care division Solta Medical Corp. via a Nasdaq listing.
After the IPO, Mr. Papa will be CEO of Bausch + Lomb, while the parent company’s current chairman, Thomas Appio, will be the new CEO of Bausch Health and Scott Hirsch will lead Solta.
Morgan Stanley Canada Ltd. and Goldman Sachs Canada Inc. are leading Bausch + Lomb’s IPO, and there are no Canadian investment banks in the company’s underwriting group, which is unusual for a TSX-listed offering.
Bausch + Lomb is making its public markets debut after a freeze this winter in what had been a hot market for IPOs. In February, falling growth-oriented stocks, rising interest rates and Russia’s invasion of Ukraine combined to spook investors.
In 2022, US social media platform Reddit and driving assistance pioneer Mobileye were preparing for multibillion-dollar IPOs, as were a number of smaller Canadian tech companies. Those plans are now largely on hold. The largest IPO so far this year is that of private equity firm TPG Inc., which raised US$1 billion in January. TPG’s share price then fell 23%.
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