Advanced Medical Optics formalizes bid for Bausch & Lomb

Santa Ana, CA-Advanced Medical Optics (AMO) formally has proposed acquiring Bausch & Lomb for $75 per share in cash and AMO stock. An AMO proposal submitted to Bausch & Lomb values the latter company at approximately $4.3 billion.

Bausch & Lomb announced its intentions to merge with affiliates of Warburg Pincus, a global private equity firm, on May 16. The transaction was valued at approximately $4.5 billion, including about $830 million of debt. Under the terms of that agreement, Bausch & Lomb was entitled to solicit superior proposals from third parties for 50 calendar days and also could respond to unsolicited bids. If talks result in an agreement with another party, Bausch & Lomb would be required to pay a $40 million “break-up fee” to affiliates of Warburg Pincus.
 
In a statement issued May 24, when AMO first confirmed its interest in Bausch & Lomb, AMO officials said they believed that the proposed transaction with Warburg Pincus undervalued Bausch & Lomb. In a subsequent statement issued July 5, AMO officials maintained that merging AMO and Bausch & Lomb would significantly expand AMO’s global scale and scope, product portfolio, and “ability to generation efficiencies and innovation.”

“This is a truly unique opportunity that would enable AMO to accelerate our strategic goal of providing a full range of advanced technologies to address the vision needs of patients of all ages,” said James V. Mazzo, AMO chairman, president, and chief executive officer. “Bausch & Lomb has played a historic role in our industry, and we have enormous respect for its proud heritage and skilled employees. Together, I believe we have a unique opportunity to create a company that is capable of changing the face of our industry and will bring benefits to our patients, customers, employees, and shareholders.”

Subsequent to the merger, “non-core assets” would be sold, Mazzo said. “We have already identified sufficient cost-saving opportunities that would make the transaction accretive on a cash basis in year two,” he added.

AMO is valued at $3.8 billion, he said.