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Warburg Pincus is looking to sell its eye-care company Bausch & Lomb, and Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and Sanofi (NYSE:SNY) have all shown an interest in acquiring the company that made Ray-Bans an iconic sunglass brand.
With the assistance of Goldman Sachs, Warburg has decided to sell the business for approximately $10 billion and will begin seeking first-round bids by the end of January. In 2007, the global private equity firm took Bausch & Lomb private, buying the company for $4.6 billion, including debt. Since the buyout, the company’s annual earnings before interest, taxes, depreciation, and amortization have increased from approximately $400 million to just under $700 million. If the Warburg is able to sell the eye-care company at its set price, the business will sell for 12 to 13 times its projected 2013 earnings of $800 million.
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With Bausch & Lomb’s price set at $10 billion, the firm will realize more than a 200 percent gain on its $1.7 billion equity investment in the company, which manufactures products ranging from contact lenses to eye-care solutions.
The firm hopes to sell Bausch & Lomb’s three different businesses — pharmaceuticals, vision care, and surgical — as a single unit because a breakup could increase its tax burden, according to Bloomberg. Abbott, which spun off its research-based pharmaceuticals business earlier in the week, will most likely be willing to purchase the whole company as it could “swallow the parts it isn’t interested in or sell those off later,” sources familiar with the company told the publication. But Sanofi may be less amenable.
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