Canadian firm buying eyecare giant Bausch & Lomb

BAUSCH & Lomb (B&L), the US eye-care company that announced the closure of its Livingston contact lens factory in 2009, has agreed to an $8.7 billion (£5.8bn) takeover by Canada’s Valeant Pharmaceuticals.

Bausch and Lomb's former plant in Scotland. Picture: TSPL

Valeant is paying private equity firm Warburg Pincus $4.5bn in cash and will spend $4.2bn to repay the group’s debt, in a deal partly financed by an issue of new equity.

The purchase will strengthen Valeant’s capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and add ophthalmic surgical devices and instruments to its portfolio, which include prescription drugs and over-the-counter products.

Valeant chief executive Michael Pearson said: “B&L’s world-renowned brand, comprehensive portfolio of leading eye-care products and promising late-stage pipeline are an ideal strategic fit for our current ophthalmology business.”

He added: “With this transaction, Valeant will be a worldwide leader in both dermatology and eye health.”

Valeant has been on the acquisition trail since its 2010 takeover by Biovail. It has been pursuing deals with strong cash flow in high-growth areas where big pharmaceutical companies have little presence.