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Will an Eyecare Company Be at the Center of the Year’s Biggest PE Deal?

Bausch + Lomb has stirred up significant interest from the pair of private equity giants, TPG and Blackstone.

Photo of contact lenses
Photo by Nataliya Vaitkevich via Pexels

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Here’s a lens into the state of M&A. 

After kicking off a sales process roughly a month ago, eye-health firm Bausch + Lomb has stirred up significant interest from private equity giants TPG and Blackstone. On Monday, the Financial Times reported the firms have teamed up for a joint bid to take the company private in what may just be the biggest PE deal of the year.

Contact Sport

It’s been a long road for Bausch + Lomb, which has been spinning its wheels amid a messy four-year spin-off attempt from parent company Bausch Health, formerly known as Valeant. Back in 2020, the mothership carved out the lucrative Bausch + Lomb division, and, in 2022, took it public while retaining a roughly 88% stake.

While Bausch + Lomb, one of the world’s largest contact lens suppliers, has remained a successful enterprise, its parent company has struggled — it now sits on a roughly $21 billion debt load, with some $10 billion coming due by the end of 2027. That’s put the spin-off of Bausch + Lomb on indefinite delay, as creditors have gone to war with Bausch Health shareholders (including famed activist investor Carl Icahn, who would become one of Bausch + Lomb’s top shareholders following a complete spin-off) over the future of the parent company. A sale to the two PE giants may end up being a compromise:

  • Creditors, including Apollo Global Management and Elliott Management, have warned that a spin-off of the eyecare subsidiary would cut off the parent company from a key revenue source, and they fear it could go insolvent. Some creditors would prefer it if Bausch Health filed for Chapter 11 bankruptcy and restructured its debt load, The Wall Street Journal reported in August.
  • The proceeds of a sale to PE — likely at a premium to its current enterprise value of $11.5 billion including debt — could be used to help the parent company shore up its balance sheet.

Eyes on the Prize: Shares of Bausch + Lomb have climbed roughly 18% in the past month amid rumors of a private equity sale; on Monday, they spiked 7%. The eyecare giant also received approval from the US Food and Drug Administration for its enVista Envy full range of vision intraocular contact lenses, likely assisting in the share price boost. Meanwhile, Bausch Health is staring down a debt-laden future without the sales power of its lead drug, the gastrointestinal medication Xifaxan, which will see its patent expire in 2029.