Bausch & Lomb Inc. (NYSE: BOL) needed a savior, and today it announced it had found one in private equity firm Warburg Pincus, which agreed to buy the troubled eyecare products company for $3.67 billion. It's a match that makes eminent sense: Warburg Pincus is the long-acknowledged master of health care finance, skilled at using its heft in the industry to orchestrate turnarounds of the small and mega varieties. Bausch & Lomb is plagued by product recalls which have delayed financial reporting and caused a major hit to the brand's reliability. What once was seen as a premium brand has fallen significantly in the eyes of the consumer -- and management hasn't yet shown any nimbleness in addressing its brand and accounting issues.
The purchase price, about $67.40 a share (Warburg Pincus will also assume $830 million of the company's debt), is only a small premium to the current price, and already the stock is up $5.75, or 9.3%, to $67.25 on the news. Analysts agree that the deal seems fair, and that going private for a bit makes sense for Bausch & Lomb -- it's not easy dealing with such huge issues in the public eye.
Meanwhile, members of the health care group at Warburg Pincus must be salivating for the chance to do every PE employee's favorite task: get strategical and really fix something.
Bausch & Lomb sold to Warburg Pincus for $3.67 billion
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