Warburg Pincus buys Bausch & Lomb for $4.5bn

Warburg Pincus has added to its healthcare portfolio with a $4.5 billion deal to buy Bausch & Lomb - best known for its line of contact lenses; the company also markets a line of pharmaceuticals used to treat eye conditions. Bausch & Lomb can continue to look at other offers, but would have to pay Warburg Pincus a $40 million breakup fee if the company decides to take another bid.


That may be less likely, as Bausch & Lomb has 344 product liability suits, related to the massive worldwide recall a year earlier of its ReNu with MoistureLoc lens solution after the solution was linked to a fungal infection of the cornea, Fusarium keratitis. Earlier this year it announced a limited recall of its ReNu MultiPlus contact lens solution. So a fair amount of healthcare execution challenge is there.

Warburg Pincus paid about 25% premium on the '30 day-volume weighted-average share price' before the speculation of this deal came out in press.



The agreement continues a relatively newer trend in private equity deals - which is to go for higher risk/turnaround companies.

• Just earlier this week on Monday, private-equity firm Cerberus Capital Management agreed to pay $7.4 billion for an 80% stake in the Chrysler Group. full story.
• Triad Hospitals Inc. was taken private for $6.4 billion in Feb 2007. full story.
• Hospital operator HCA Inc. was bought last year in a massive $33 billion deal. full story.