Bausch + Lomb, a well-known leader in eye care, is about to hit Wall Street in what investment bankers almost certainly hope will jump-start a weak initial public offering (IPO) market.
Bausch Health Companies (BHC) is a global healthcare stock that develops pharmaceuticals, medical devices and over-the-counter medications, with focus areas in eye health, gastroenterology and dermatology.
However, to help streamline its operations and pay down debt, Bausch is spinning off its Bausch + Lomb eye care division in what is shaping up to be one of 2022's most anticipated IPOs.
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Bausch + Lomb sells contact lenses, eye drops and even implantable lenses for cataract surgery in more than 100 countries. The division boasts more than 400 products, more than 260 of which came on the market since 2017.
You can thank Bausch + Lomb's robust R&D arm, which has about 850 employees. The current product pipeline includes more than 100 projects, such as treatments for dry eye, contact lenses to slow myopia, and next-gen cataract equipment.
The focus on innovation has helped to grow the top line. For 2021, division revenues jumped by 10.6% to $3.8 billion – part of BHC's overall revenues of $8.4 billion, up 5% – and the company flipped from a loss of $17 million to a net gain of $193 million.
"While it faces significant competition from other brands and generic products, the company is highly profitable with strong cash flow, and it has global brand awareness of more than 70%," says Renaissance Capital, an IPO-focused registered investment adviser.
The Bausch + Lomb IPO will see the company list on the New York Stock Exchange under the ticker BLCO. The offering, expected May 5, should see 35 million shares listed at a price range of $21 to $24 per share. That would see the company raise $788 million at a valuation of $8.2 billion.
The offering is a breath of fresh air in what has been a lousy year for IPOs. Financial markets platform Dealogic says that more than a thousand companies went public in 2021, raising roughly $316 billion in the process.
However, a weakening environment for stocks in late 2021 and into 2022 cramped the market's appetite for offerings. Renaissance Capital says just 26 IPOs have priced in 2022 – off 80% from the same point last year.
Expect other potential offerings to keep their eyes trained on the Bausch + Lomb IPO. A favorable reception could get a few more new stocks into the market.
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