Bausch + Lomb: FT Reports BLCO Hires Bankers—Assessing “Valuation”, Is a Strategic Sale the Key to Turnaround?

Bausch + Lomb, one of the world’s largest contact lens suppliers, is reportedly exploring a sale to resolve its troubled spin-off from heavily indebted parent company, Bausch Health. This development, guided by Goldman Sachs, reflects pressure from creditors over the solvency concerns surrounding Bausch Health, which retains an 88% stake in its eyecare subsidiary. With Bausch + Lomb’s enterprise value hovering just above $10 billion and private equity interest building, a sale could potentially offer a route for the parent company to manage its $21 billion debt load, of which $10 billion is due by 2027. However, the transaction's success is uncertain, with the eye care business expected to generate $4.7 billion in revenue and $860 million in EBITDA this year. A sale would offer Bausch Health the capital to address its debt obligations, but questions remain around its future, particularly as its lead drug Xifaxan nears patent expiry by 2029. With prominent shareholders like Carl Icahn and John Paulson favoring the spin-off, a sale could satisfy both creditors and shareholders, but any deal would need to offer a significant premium over the current valuation to reflect the business's solid performance, while untangling the complexities of Bausch Health’s balance sheet. We see BLCO trades at an NTM TEV/EBITDA of 10.82x, positioning it below sector leaders such as HOYA (19.80x) and The Cooper Companies (19.6x), while remaining above peers like DENTSPLY SIRONA (9.86x) and Haemonetics (10.74x). This valuation suggests.......We delve into Lens on a Clearer Future—Bausch + Lomb Debt Woes, Profitability Levers, and a Potential Turnaround Through Strategic Sale-Major Drivers, Forecasts/ Estimates, Market Valuation,Peer Analysis & Key Risks.