Spinoff Would Unlock Value in the Iconic Bausch + Lomb Brand
and Integrated Portfolio of Eye Health Products
Transaction Will Enable BHC to Focus on Expanding Its
Leadership in Gastroenterology, Aesthetics/Dermatology, Neurology
and International Pharma
New Segmentation Enhances Focus and Highlights Two Highly
Attractive, but Dissimilar Businesses
LAVAL, QC, Aug. 6, 2020 /CNW/ -- Bausch Health
Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company")
today announced that it intends to spin off its leading eye health
business into an independent publicly traded entity ("Bausch + Lomb
- NewCo") from the remainder of Bausch Health ("BHC"). The spinoff
will establish two separate companies that include:
- A fully integrated, pure play eye-health company built on the
iconic Bausch + Lomb brand and long history of innovation; and
- A diversified pharmaceutical company with leading positions in
gastroenterology, aesthetics/dermatology, neurology and
international pharmaceuticals.
The benefits of separating these attractive, but disparate
businesses include improved strategic focus and enhanced financial
transparency to better enable stakeholders to value each business
independently. The timing of the anticipated spinoff will be tied
to certain conditions and approvals, and the Company's
completion of several important actions, including the
reorganization of the reporting segments, which we expect to begin
reporting in the first quarter of 2021.
"We are committed to taking action to unlock what we see as
unrecognized value in Bausch Health shares, and we believe that
separating our business into two highly focused, stand-alone
companies is the way to accomplish that goal," said Joseph C. Papa, chairman and CEO of Bausch
Health. "Four years ago, we initiated a multi-phase plan, first to
stabilize and then to transform Bausch Health into a company
positioned to deliver long-term organic growth. We have divested
approximately $4 billion of non-core
assets, paid down over $8 billion of
debt, resolved numerous legacy legal issues and managed a loss of
exclusivity on an approximately $1.4
billion product portfolio, while also investing in R&D,
new product launches and core franchises with attractive growth
opportunities. Our Board of Directors and management team have been
working on alternatives over the last 12 months to determine how to
best unlock value across our businesses, and we believe that the
time is right to begin the separation process, so each business has
greater flexibility to pursue strategic opportunities in their
respective markets."
Bausch + Lomb - NewCo
Bausch + Lomb - NewCo, which
will consist of Bausch Health's global vision care, surgical,
consumer and ophthalmic Rx businesses, would have had 2019 revenue
of approximately $3.7 billion and a
CAGR of 4.1% (2017-2019). We believe that Bausch + Lomb - NewCo is
well-positioned to continue delivering consistent organic revenue
growth across the globe, with more than half of its sales outside
of the United States. The
combination of pipeline expansion and established durable eye care
brands, including BAUSCH + LOMB ULTRA®, Biotrue® ONEday, LUMIFY®,
Ocuvite® and PreserVision®, among others, as well as the launch of
BAUSCH + LOMB INFUSE™ contact lenses, is expected to drive this
growth.
BHC
BHC, which would have had 2019 revenue of
approximately $4.9 billion and CAGR
of 1.8% (2017-2019), will comprise a diversified portfolio of
leading durable brands across the Salix, International Rx, Solta,
neurology and medical dermatology businesses. Core products include
XIFAXAN®, TRULANCE® and RELISTOR® for gastrointestinal diseases;
JUBLIA®, DUOBRII® and Thermage® FLX for dermatologic conditions;
and WELLBUTRIN® and APLENZIN® for neurological conditions.
Transaction Information
Bausch Health will need to
take several steps to facilitate the completion of the spinoff. As
a first step to preparing stand-alone carve-out financial
statements, Bausch Health expects to report Bausch + Lomb as a
separate segment beginning in the first quarter of
2021. Furthermore, there are several important internal and
external considerations, approvals and conditions that will drive
the ultimate timing and structure of any transaction, including,
but not limited to, consideration of one-time costs; capital market
conditions; determination of the pro forma capitalizations of
Bausch + Lomb - NewCo and BHC; final approval by Bausch Health's
Board of Directors; receipt of applicable regulatory approvals; tax
considerations, including receipt of any applicable opinions and/or
rulings with respect to the Canadian and U.S. federal income tax
treatment of the transaction; and compliance with U.S. and Canadian
securities laws and stock exchange rules and any shareholder vote
requirements that may be applicable. Many of these considerations,
approvals and conditions will be influenced by and/or be dependent
on the specific structure that is ultimately selected.
Bausch Health's management has initiated a process to determine
the future executive leadership teams for each company. As the
separation process commences, the Company looks forward to
providing additional information on the future management teams and
Boards of Directors for both companies.
Morgan Stanley & Co. LLC and Goldman Sachs are serving as
financial advisors; Wachtell Lipton Rosen & Katz in
the United States, and
Osler, Hoskin & Harcourt in
Canada are acting as lead legal
counsels; and Davis, Polk & Wardwell is acting as tax
counsel.
About Bausch Health
Bausch Health Companies Inc.
(NYSE/TSX: BHC) is a global company whose mission is to improve
people's lives with our health care products. We develop,
manufacture and market a range of pharmaceutical, medical device
and over-the-counter products, primarily in the therapeutic areas
of eye health, gastroenterology and dermatology. We are delivering
on our commitments as we build an innovative company dedicated to
advancing global health. More information can be found
at www.bauschhealth.com.
Forward-looking Statements
This news release includes
information that could constitute forward-looking statements made
pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities
laws. These statements include those set forth above regarding our
plan to spin off the Company's eye health business, the ability of
each of BHC and Bausch + Lomb - NewCo to focus on distinct
therapeutic areas, the anticipated capital structure and financial
strength of BHC and Bausch + Lomb - NewCo following the spinoff,
the tax treatment of the transaction for the Company and its
shareholders, the timing for completing the segmentation of the
Bausch + Lomb business and for completing the spinoff transaction
as well as those that may be identified by words such as "will,"
"intend," "expect," "anticipate," "should," "could" and similar
expressions.
These forward-looking statements are based upon the current
expectations and beliefs of management and are provided for the
purpose of providing additional information about such expectations
and beliefs, and readers are cautioned that these statements may
not be appropriate for other purposes. These forward-looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
described in these forward-looking statements. These assumptions,
risks and uncertainties include, but are not limited to, the
expected benefits and costs of the spinoff transaction, the
expected timing of completion of the spinoff transaction and its
terms, our ability to complete the spinoff transaction considering
the various conditions to the completion of the spinoff transaction
(some of which are outside the Company's control, including
conditions related to regulatory matters and a possible shareholder
vote, if applicable), that market or other conditions are no longer
favorable to completing the transaction, that any shareholder,
stock exchange, regulatory or other approval (if required) is not
obtained on the terms or timelines anticipated or at all, business
disruption during the pendency of or following the spinoff
transaction, diversion of management time on the spinoff
transaction-related issues, retention of existing management team
members, the reaction of customers and other parties to the spinoff
transaction, the qualification of the spinoff transaction as a
tax-free transaction for Canadian and/or U.S. federal income tax
purposes (including whether or not an advance ruling from either or
both of the Canada Revenue Agency and the Internal Revenue Service
will be sought or obtained), potential dissynergy costs between BHC
and Bausch + Lomb - NewCo, the impact of the spinoff transaction on
relationships with customers, suppliers, employees and other
business counterparties, general economic conditions, conditions in
the markets the Company is engaged in, behavior of customers,
suppliers and competitors, technological developments, as well as
legal and regulatory rules affecting the Company's business, and
other specific risk factors that are outlined in our disclosure
filings and materials, which you can find on
https://ir.bauschhealth.com/, such as our 10-K, 10-Q and 8-K
reports that have been filed with the U.S. Securities and Exchange
Commission. Please consult these documents for a more complete
understanding of these risks and uncertainties. This list of
factors is not intended to be exhaustive.
The Company believes that the material factors and assumptions
reflected in these forward-looking statements are reasonable in the
circumstances, but in light of the use of assumptions and the
significant risks and uncertainties inherent in such
forward-looking statements, there can be no assurance that any such
forward-looking statements will prove to be accurate and
accordingly, readers are cautioned not to place undue reliance
on any of these forward-looking statements. In particular, the
Company can offer no assurance that any spinoff transaction will
occur at all, or that any spinoff will occur on the terms and
timelines anticipated by the Company. These forward-looking
statements speak only as of the date hereof. The
Company undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances after
the date of this news release or to reflect actual outcomes, unless
required by law.
Investor
Contact:
|
Media
Contact:
|
Arthur
Shannon
|
Lainie
Keller
|
arthur.shannon@bauschhealth.com
|
lainie.keller@bauschhealth.com
|
(514)
856-3855
|
(908)
927-1198
|
(877) 281-6642 (toll
free)
|
|
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SOURCE Bausch Health Companies Inc.