Look Out for Bausch & Lomb’s IPO

Public offering apparently a second choice for Warburg Pincus

   

Bausch & Lomb, developer of contact lenses and other eye-care products, is making another return to the public markets.

B&L was publicly traded from 1958 to 2007, when it went private in a $4.5 billion transaction sponsored by Warburg Pincus.

According to a report in the The New York Times, Warburg Pincus was actually looking to sell B&L back in December, but there were no bidders above the valuation of $10 billion. So, it looks like an IPO was the next best option, and last Friday, the company filed its S-1 with the Securities and Exchange Commission.

B&L is a powerhouse in the eye industry, with a portfolio of more than 300 products in more than 100 countries. The company also has a strong distribution network that includes over 3,700 people in its sales organization. About a quarter of sales come from emerging markets, with strong footprints in Brazil, China, India and Russia.

At the same time, B&L continues to invest heavily in its pipeline of new products.  Some of the new offerings include next generation silicone hydrogel contact lenses and a laser-guided cataract surgery platform.

The eye market apparently still is in a growth phase. Based on a study from an independent consulting firm — which was not named in the S-1 — global sales are expected to improve from $36 billion in 2011 to $48 billion in 2017, for a decent 5% compound annual growth rate.  Some of the drivers include the aging of the global population, the growth in the middle class in emerging markets and the spread of diseases that cause vision problems, such as diabetes.

Over the past two years, B&L has put in place a new plan to capitalize on opportunities and improve efficiencies, and so far, the results have been encouraging. During this period, the growth rate in sales was 9% (to $3 billion) and EBITDA was 17% (to $643.1 million). About 80% of sales were private pay, which involved no government assistance — and that’s key, as most health product makers likely will see more pressure to lower costs for Medicare and Medicare.

As for the IPO, B&L’s lead underwriters include JPMorgan Chase (NYSE:JPM), BofA Merrill Lynch (NYSE:BAC) and Citigroup (NYSE:C).

Pricing information was not disclosed.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


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