Eye-lens maker Bausch + Lomb, Monday agreed to acquire ISTA Pharmaceuticals, Inc. (ISTA) for about $500 million or $9.10 per share in cash. The deal, which has the unanimous approval of the two company's boards, is expected to close in the second quarter of 2012.
The Bausch + Lomb purchase price indicates a 10% premium to the share price as of the market close on March 23, 2012. The price provides a 40% premium to the proposal from Valeant Pharmaceuticals and also indicates a 134% premium to the share price on December 15, 2011, the trading day prior to the receipt of Valeant Pharmaceuticals offer and ISTA board announcement of its intention to review strategic options.
The acquisition is expected to accelerate Bausch + Lomb's efforts at strengthening its pipeline and marketed products. In the long term, the acquisition is expected to drive growth and high performance for Bausch + Lomb. ISTA's portfolio includes non-steroidal, anti-inflammatory, allergy, glaucoma and spreading agents, while Bausch + Lomb portfolio of comprise existing Rx ophthalmology and OTC eye health products.
Brent Saunders, president and chief executive officer, Bausch + Lomb, observed, "ISTA is an excellent strategic fit with Bausch + Lomb's rapidly growing pharmaceutical business, and this combination represents an important step in Bausch + Lomb's commitment to becoming the best global eye health company."
Bausch + Lomb's portfolio includes most of ISTA's current U.S. products, with a "strong overlapping customer base in the U.S." The company believes the merger will significantly enhance its pharmaceutical pipeline, "nearly doubling the number of mid- to late-stage innovations."
Until consummation of the transaction, the two companies would continue to operate independently. The transaction is subject to regulatory approvals and other customary closing conditions, including ISTA shareholders' approval. Bausch + Lomb said it intends to finance the acquisition with a combination of cash on hand and the proceeds of a $350 million incremental term loan facility under its existing credit facility.
ISTA closed Monday's regular trade at $8.38. Following the announcement the shares went up $0.67 or 8% to $9.05 in the after-market hours.
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