As Tom mentioned, we continue to make significant strides in deleveraging our balance sheet this quarter. What's next Bausch Health also plans to take Solta Medical public . To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. You can learn all about that at the following links! While management reiterated their confidence that the trial will go in their favor, saying their legal team "felt more confident at the end of the trial versus at the start of the trial," they did not go into much detail as to what happens if it goes the other way. A favorable reception could get a few more new stocks into the market. Bausch & Lomb, Bausch Health Companies, Joe Papa, medical devices. It doesn't matter exactly what value the remainco gets because it would be the cherry on top in this transaction. I've been writing for Seeking Alpha since 2013 after playing p0ker professionally. I/we have a beneficial long position in the shares of BHC either through stock ownership, options, or other derivatives. Today, Bausch + Lomb traded as . Updated April 27, 2022 Reviewed by Khadija Khartit A spinoff is created when a company forms some part of its operations into a separate entity and distributes shares in it tax free to. Nasdaq Answering a common question Lastly, we want to address Club member questions we received a few times, which is how Bausch Health accounts for its BLCO position when providing financials. Along the way, Tom has written columns for online publications such as Bloomberg, Forbes, Barron's and Kiplinger. CHICAGO, ILLINOIS - MAY 05: Bausch + Lomb eye vitamins are offered for sale at a drug store on May [+] 05, 2022 in Chicago, Illinois. Proceeds from any Solta IPO would be used to unlock more value for shareholders as well, and so we're willing to be patient and wait for that to happen. The 89% Bausch + Lomb Corporation stake is worth $5.7 billion. Bausch is also hoping for a value over $20 billion since they only want to IPO "up to 20%" with hopes those proceeds will be enough to lower the company's debt. LAVAL, QC and VAUGHAN, ON, May 5, 2022 /PRNewswire/ -- Bausch + Lomb Corporation ("Bausch + Lomb"), a wholly owned subsidiary of Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health"),. Find the latest Bausch Health Companies Inc. (BHC) stock quote, history, news and other vital information to help you with your stock trading and investing. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Best Debt Consolidation Loans for Bad Credit, Personal Loans for 580 Credit Score or Lower, Personal Loans for 670 Credit Score or Lower. In my opinion, the current inflationary regime is a little bit of a tailwind. Of course, if BLCO performs well and shares appreciate before then, the debt paydown at BHC would be greater, as would the distribution to shareholders in the form of BLCO shares. The value of the Bausch and Lomb shares is more than the current market capitalization of the entire company. Si vous souhaitez personnaliser vos choix, cliquez sur Grer les paramtres de confidentialit. Visa is next with $19.6 billion, followed by General Motors with $18.1 billion. BLCO did close up 11% to $20 per share. Shares of Bausch Health (NYSE: BHC) were up more than 27% late Wednesday afternoon because the company announced it had received a favorable court ruling affecting one of its leading therapies. The money raised will go to BHC, according to the filing. Bausch + Lomb is one of two separations and IPOs BHC is preparing. Renaissance Capital says just 26 IPOs have priced in 2022 off 80% from the same point last year. Get the latest industry news first when you subscribe to our daily newsletter. Get this delivered to your inbox, and more info about our products and services. So it came as no surprise to me that BLCO's IPO was a . It is possible about a billion of debt at an unrestricted subsidiary doesn't count or some form of adjusted EBITDA is allowed which gets the company within the 6.5 - 6.7x net leverage target it wants to hit. "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. Recall, that one key issue plaguing BHC is a roughly $20 billion net debt load on the balance sheet. Bausch Health Companies Inc. has hit the internal metrics necessary to justify spinning off more Bausch + Lomb shares. It remains to be seen if it will be the entire 89% stake. Privacy Center | Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Our full year debt reduction was approximately $3.8 billion of principal balances on a consolidated basis for the full year and $3.2 billion since the B + L IPO. This comes as no surprise to me which is why I lamented in my 2019 book, Scaling Your Startup, that most startups were skipping the second stage of scaling e.g., streamlining operations to get cash flow positive before taking on more capital. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. The significant reduction in debt since the B + L IPO has enabled us to achieve the financial matrix required under our debt documents to un-restrict Bausch + Lomb, which we did in the fourth quarter. create value for shareholders. After weathering an accounting scandal and facing scrutiny for acquiring drugs then steeply hiking their prices in 2018, it changed its name from Valeant to Bausch Health Companies, according to the Financial Times. As part of this, BLCO stock is expected to start trading on the New York Stock Exchange on Friday, May 6. More than 50 funds that own Bausch Health Companies Inc (NYSE: BHC) investors are reportedly seeking to block the eye-care business spin-off, Bausch + Lomb Corp (NYSE: BLCO). THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . and our Why Is Forza X1 (FRZA) Stock Up 145% Today? Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. 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. Xifaxan is one of the most important assets if BHC spins off the BLCO shares. The major benchmarks rallied into the long weekend after lawmakers said they're making strides in debt ceiling negotiations. Please disable your ad-blocker and refresh. That would see the company raise $788 million at a valuation of $8.2 billion. The plan is to launch a Bausch and Lomb debt offering (~2 billion/2.5x net leverage), an IPO of Bausch and Lomb ("up to 20%"), an IPO of Solta Medical ("20 to 30%") and use to proceeds to pay down $7 billion of debt to reduce the net leverage of the remaining company (Bausch Pharma) to 6.5-6.7x. Given these poor results and our loss of faith in management's ability to unlock further value via spinoffs following the completely botched Bausch + Lomb separation, we downgraded shares on May 10 to a 4 rating, designation we have not had a use for until now. Bausch Health shares plunge amid spin-off, weaker outlook Smaller-than-expected proceeds of May's ill-timed B+L offering went to pay down debt at BHC, which plans to further monetize that stake in the future. Basically, what's good for the spinoff case is decent performance at both BHC and BLCO so the transaction doesn't hurt BHC bondholders too much or put it at real risk of insolvency. The post BLCO Stock: 7 Things to Know About the Bausch + Lomb IPO Today appeared first on InvestorPlace. 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. I wrote this article myself, and it expresses my own opinions. The leftover company isn't highly attractive as it is highly debted with a legacy Pharma business, but it does generate a lot of free cash flow and can de-lever especially if Solta business is IPOed or sold off. Best Debt Consolidation Loans for Bad Credit, Personal Loans for 580 Credit Score or Lower, Personal Loans for 670 Credit Score or Lower. All ideas will be thoroughly researched and clearly presented. The big news from the earnings report today is diluted earnings per share of -19 cents. So we continually to thoughtfully evaluate all relevant factors related to the B + L separation. The company now has $16.6 billion of debt which is 85% fixed rate (meaning it really benefits the company, at least in the short term, if rates rise). afficher des publicits et des contenus personnaliss en fonction de vos profils de centres dintrt; mesurer lefficacit des publicits et contenus personnaliss; et. Thoughts on BHC and BLCO? As a Bausch Health Companies Inc. shareholder, it is a very attractive proposition. We think Bausch + Lomb willeventually trade at a higher multiple. Please disable your ad-blocker and refresh. I am not receiving compensation for it (other than from Seeking Alpha). It retains a roughly 90% stake in BLCO. I don't think the Xifaxan litigation is going to stop the company from doing a value-creating transaction like a spin-out, but it gets a lot more comfortable if the issue was cleared up. This was below the company's expected range of between $21 and $24 per share. For those who knew Bryan Vaughan, the late founder of TriNet Pharma, he was an []. Last August, the company announced plans to spin off Solta Medical, its skin care business. After the spinoff, the rest of the Bausch and Lomb shares will be distributed and the rest of Solta Medical will be kept to help de-lever the company further. This is bad news for the IPO market and for money-losing startups that are already struggling to raise more venture capital. The company's own target range was between $21 and 24 per share. Entering text into the input field will update the search result below. The company has been quite good at taking out debt. All signs are pointing towards some kind of transaction in 2023. Looking for a portfolio of ideas like this one? Bausch + Lomb IPO: What You Need to Know | Kiplinger 7 Best Biotech Stocks to Build Your Portfolio. Hint: Its About the Production, Preparing For Takeoff: Unraveling The Investment Opportunities Amid 2023s Air Travel Boom, Gap Stock Has Upside Potential To Its Pre-Inflation Peak, MetLife Stock Has A 44% Upside To Its Pre-Inflation Peak. Accordingly, BLCO stock will be an interesting one to watch from here. In the filing, Bausch + Lomb set a $100 million placeholder figure for proposed stock offering. That said, BLCO stock quickly shot above this IPO price, opening at $18.50 per share. All Rights Reserved. Remember, investors know what the debt is and can model it, what we don't have as much clarity on is the outcome of a Xifaxan patent trial that will determine how long it is before generic competition is allowed to come to market. Sign up for free newsletters and get more CNBC delivered to your inbox. On the IPO, which was priced well below the company's range at $18 per share, BHC got $630 million to pay down debt. Add in the roughly $2.2 billion debt that BLCO is taking on, and the company has an enterprise value of $8.5 billion, RBC estimates. Analysts Disclosure: I/we have a beneficial long position in the shares of BHC either through stock ownership, options, or other derivatives. However, the stock price has not reflected the progress made by management and the true intrinsic value. HypeZero provides individual investors with investment ideas that have historically been proven to outperform the market. Let's dive into what this could mean for investors. At ASCO, BioNTech Shows Encouraging Data for Drug That Led to $200M Deal, Federal Lawsuit Alleges Tennessees Employee Benefits Program Discriminates Against Transgender People, The Challenges of Temperature Controlled Logistics and How to Overcome Them, MedCity INVEST Speaker Q&A: Thompson Coburns Daniel Tardiff, Canada and the Midwest in Life Sciences, 75 Years in the Making, TriNet Pharma Highlights the Rise of the Medical Science Liaison and Honors Legacy of Its Founder. Here's a basic step-by-step process on how we thought BHC shareholders would benefit: BHC's large net debt load, almost $21 billion, has weighed on its multiple, preventing its stock from trading at a higher equity valuation. As we pointed out in a recent article, Bausch + Lomb is the recent spinoff of core brand Bausch Health Companies (NYSE:BHC). Data is a real-time snapshot *Data is delayed at least 15 minutes. Got a confidential news tip? I am not receiving compensation for it (other than from Seeking Alpha). As the Journal reported, IPOs have been virtually shut down since stocks started falling earlier this year. Papa said in his JPM presentation that proceeds from both the Bausch + Lomb and Solta IPOs would be used to pay down BHCs debt. While the Investing Club doesn't directly own stock in the recent Bausch + Lomb IPO for the Trust, Bausch Health owns about 90% of its former eyecare unit. Bausch Health Companies (BHC), the parent company of Bausch + Lomb, announced in 2020 its plans to spin off the eye health business as an independent and publicly traded company. Kiplinger is part of Future plc, an international media group and leading digital publisher. Assuming management monetizes the additional 8.7% at $15.66, they should be . Here's where I'm at. If the plan had gone through, the company would have raised $788 million at a valuation of $8.2 billion some $500 million below the price at which BHC acquired it six years ago. The company is counting on significant expenses related to such a transaction. In the meantime, we remain focused on commercial performance and improving our operating results reinforcing a solid foundation for the future. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. November 22' the FDA issued updated guidance that makes it harder for this to happen. In addition, we will provide investors access to all the research and tools that allow us to generate these ideas. The stock market continues to grind lower reducing the valuation of the overall market including BHC and its spinoff. Actually taking out debt at a discount to face value in the open market (emphasis mine): Now let's turn to our balance sheet on Slide 22. 89% of Bausch + Lomb shares are held by Bausch Health. But we are positioned to move forward with either the Bausch + Lomb or the Solta IPO quickly when market conditions are right for each of them.. As we have stated, we disagree with certain portions of the court's decision and have filed an appeal. In prior quarters, I've always found Bausch Health management quite guarded around the timing and specifics of this potential spinoff. Recall, that one key issue plaguing BHC is a roughly $20 billion net debt load on the balance sheet. Valeant was rebranding after weathering an accounting scandal and facing scrutiny for its practice of acquiring drugs then steeply hiking their prices. You may opt-out by. Today, it appears the market has agreed. The pharma business of BHC that remains will also be a standalone, publicly traded company. I am not receiving compensation for it (other than from Seeking Alpha). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com, 5 Artificial Intelligence Stocks to Buy Before They Skyrocket, PTON Stock Alert: 9 Things to Know as Peloton Plummets 15% After Reporting Earnings, NVAX Stock Falls 20% as Novavax Misses Q1 Estimates. However, it is better to have a margin of safety to minimize the downside. It sells more than 400 products, more than 260 of which came on the market since 2017. BHC's 90% ownership of Bausch + Lomb falls into the consolidation camp. The recent earnings calls, combined with the appointment of Brent Saunders, have greatly increased the odds of a transaction separating BHC from BLCO. Bausch + Lomb is widely considered the crown jewel held within the Bausch Health portfolio. A Division of NBCUniversal. So far 224,486 shares have traded compared to average volume of 493,259 shares. The reason for the disconnect between our December projections and BLCO's actual valuation isn't hard to locate: Sentiment on Wall Street has gotten a lot more negative in the intervening five months, as the Federal Reserve turned more hawkish and Russia invaded Ukraine. Since the court's decision was issued, Norwich has advised the court that has sought to remove the HE indication from its ANDA and has filed a motion to modify the final judgment to permit the FDA to approve the ANDA before 2029. BHC - Bausch Health Companies Inc Shareholders - CNNMoney.com I do not find its growth or profitability worth getting excited about. But, it doesn't matter since it will be free. MedCity News sat down with John Coleman, Business Unit Director at YSDS Life Science, to talk about the challenges of delivering temperature-sensitive goods and how to overcome them. BLCO did close up 11% to $20 per share. The 4 rating served notice that no action will be taken on BHC stock until more information becomes available. The IPO represented the first 10% and looking forward, it appears that another 8.7% (the difference likely the result of transaction fees) is intended to be monetized for the purposes of paying down debt. See here for a full list of the stocks.) The most valuable piece of the company is Bausch and Lomb. Nvidia stock has more than doubled this year already, but analysts say explosive growth in AI gives NVDA plenty more upside ahead. Why we care On the quarterly release, management reiterated Bausch Health's intention to complete the spinoff of additional shares of Bausch + Lomb following the expiration of customary lock-ups related to the IPO (125 days from the S1 filing date of April 28, 2022), the achievement of net leverage ratio targets, and provided market conditions are favorable and shareholder and other necessary approvals are granted. Sign up for free newsletters and get more CNBC delivered to your inbox. BHC - Bausch Health Companies Inc. - Yahoo Finance (Photo by Scott Olson/Getty Images), Earnings Preview: What To Expect From Ciena On Tuesday, Kneejerk Oil Price Rise Fizzles Out After Saudi Production Cut Bounce, What is The New Economic Patriotism? Visit our corporate site. Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Bausch + Lomb (BLCO) reported largely in-line fiscal first-quarter financial results before the opening bell Wednesday. In 2013, Valeant Pharmaceuticals paid $8.7 billion to buy Bausch + Lomb from the private equity firms, making it its eye care division.
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