Valeant Pharmaceuticals has acquired the eye health company Bausch & Lomb for $8.7 billion in cash.

The deal, which mimics Novartis’ $12.9 billion acquisition of eye care specialist Alcon in 2011, will see Bausch & Lomb will retain its name and become a division of Valeant.

Valeant’s existing ophthalmology businesses will be integrated into the Bausch & Lomb division, creating a global eye health platform with 2013 net revenue expected to reach around $3.5 billion. 

Valeant is buying into the firm’s broad portfolio of eye health products, including prescription and OTC brands such as Besivance, Lotemax, Ocuvite and PreserVision; vision care brands Biotrue ONEday, PureVision, renu and Boston; and surgical brands enVista, Storz, Stellaris and VICTUS.

Bausch & Lomb have also recently initiated late-stage trials of latanoprostene bunod (previously known as BOL-303259-X and NCX 116), which is licensed from France’s Nicox, for the reduction of intraocular pressure in patients with glaucoma or ocular hypertension.

Under terms of the agreement, Valeant will pay aggregate consideration of $8.7 billion in cash, and expects to achieve at least $800 million in annual cost savings by end of 2014.

The acquisition positions Valeant to capitalise on growing eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets. The combined business will also benefit from access to a strong product portfolio and a late stage pipeline of innovative, new products, according to the company.

Valeant’s chairman and chief executive, J. Michael Pearson, said: “We are excited to announce the acquisition of Bausch & Lomb, which will transform Valeant into a global leader in eye health by significantly strengthening our capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and ophthalmic surgical devices and instruments. With this transaction, Valeant will be a worldwide leader in both dermatology and eye health.”

Bausch & Lomb’s chief executive, Brent Saunders, said: “Bausch & Lomb has undergone a profound transformation over the last few years. We introduced innovative new products for patients; built a robust pipeline; expanded into new markets; and strengthened our relationships with eye care professionals around the world. 

“Valeant’s acquisition of our company is a testament to the tremendous value our talented employees have created over the past several years.” Saunders continued. “I am confident that under their stewardship, the Bausch & Lomb brand will continue to stand for excellence and innovation in eye health.”

Acquisition trail

Both firms have already undertaken a series of medium-to-large sized deals in recent years before this week’s acquisition.

In March last year, Bausch & Lomb purchased eye care specialist Ista Pharmaceuticals, which had previously rejected offers from Valeant, for $9.10 per share, or $500 million overall.

Valeant was on track to purchase Actavis, the world’s third largest generic drugmaker, but in April talks between the firms were rumoured to have broken down. But just last week, Actavis announced that it was looking to pay $8.5 billion for Warner Chilcott, perhaps explaining the stalling of talks with Valeant.

But in March the Canadian pharma firm paid $344 million for skincare firm Obagi and in September last year completed a $2.6 billion to buy dermatology specialist Medicis, with this week's deal showing that the firm is as deal hungry as ever.