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Bausch & Lomb may soon sell

by New York Times News Service on May 19, 2013 3:00 PM

A flurry of mergers in the health care sector appears poised to continue, as Bausch & Lomb is said to be ready to sell itself to Valeant Pharmaceuticals of Canada for about $9 billion.

A deal could be announced as soon as Tuesday, people briefed on the matter said, although they said that talks were continuing.

Bausch & Lomb, which makes contact lens solutions and other eye-care products, has been exploring a sale or a public stock offering.

If completed, a sale may signal that the mergers industry is set to revive after months of fits and starts.

Although many advisers expected a steady growth in transactions this year, total deal volume was still down 8 percent from the same time last year, at $796.7 billion, according to Thomson Reuters.

Despite the overall slump in mergers, health care has proved one of the most reliable sources of new take-overs. Deals worth about $72.4 billion have been announced in the sector so far this year, Thomson Reuters estimates. About a third of that was disclosed in the past two months, thanks to deals such as Thermo Fisher Scientific’s $13.6 billion takeover of Life Technologies.

Much of the deal activity has been prompted by the private equity industry, which has been seeking to strike new acquisitions or cash out existing investments and pay their limited partners.

Deal-making by private equity firms is up 44 percent from the year-ago period, at $133 billion, according to Thomson Reuters data.

Bausch & Lomb’s current owner, the private equity firm Warburg Pincus, has looked to clear the decks for its latest fund, which closed earlier this month at $11.2 billion. It and TPG Capital are already weighing a sale or initial public offering of another investment, the luxury retailer Neiman Marcus.

Shares in Valeant began rising Friday after The Wall Street Journal reported news of the sales talks, and closed up 13 percent, at $84.47.

Bausch & Lomb would add a major new line of offerings for Valeant, which focuses on neurology, dermatology and generic drugs.

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