Valeant Pharmaceuticals International Inc., Canada's largest publicly traded drug maker, is continuing an acquisition spree with an agreement to buy eye-care giant Bausch & Lomb Holdings Inc. for $4.5 billion.
The Montreal company, which announced the deal Monday, said it also would pay $4.2 billion in debt owed by privately held Bausch & Lomb, a major manufacturer of contact lenses.
Calling Bausch & Lomb a “world-renowned brand,” Valeant's chairman and chief executive, J. Michael Pearson, said the deal would “transform Valeant into a global leader in eye health.”
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Valeant said it expects to squeeze out $800 million in annual cost savings by the end 2014 after merging Bausch & Lomb, which is based in Rochester, N.Y., with Valeant's much smaller eye-care operations.
The deal is the largest of more than a dozen takeovers by Valeant since 2010, when the company was created though the merger of the former ICN Pharmaceuticals of Orange County with Canada’s Biovale Corp.
Valeant is buying Bausch & Lomb from private equity firm Warburg Pincus. The deal, which requires approval from regulators, is expected to close in the third quarter. Valeant said it would finance the acquisition by issuing new debt and $1.5 billion to $2 billion in new stock.
Reports that the purchase was in the works drove Valeant’s shares up 13% on Friday on U.S. and Canadian exchanges. On Monday, the stock jumped 10% above Friday's closing price on the Toronto Stock Exchange. U.S. markets were closed Monday for Memorial Day.
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