Under the deal, Valeant will pay &8.7bn, of which Warburg will receive $4.5bn and $4.2bn will be used to repay Bausch and Lomb’s outstanding debt.
Warburg will receive a return of around three times on its $1.7bn equity investment made in Bausch in 2007, according to Bloomberg’s estimates based on a takeover value of $9bn.
Valeant said it expects the deal to result in annual cost savings of $800m by the end of 2014.
Bausch expects to post an EBITDA of $720m on revenues of $3.3bn this year.
CEO of Bausch and Lomb 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.”
Earlier this year it was reported that the company was looking to raise $100m via an IPO and that Warburg was still considering a private sale of the company and had hired Goldman Sachs to find a suitor.
Warburg Pincus has invested over $8.1bn in more than 140 healthcare companies.
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