Bausch + Lomb IPO: Prepare For A Buyout

May 6, 2022

We wrote about Bausch Health Companies back in September 2020: “Bausch Health Companies: This Story Is Not Over Yet” after company announced its intention to spin-off its eye health business into an independent publicly traded company.

After almost two years, the transaction takes place. Initially as a carve out: IPO of 10% of Bausch + Lomb shares and possible future distribution through full spin-off.

We believe that at $18 per share company is attractive as it would be valued at an EV/EBITDA (FY 2021) multiple of about x11.5 and have a Free Cash Flow Yield of about 8.5% percent.

Compared to this, Alcon for example trades at a significant premium at x20 EV/EBITDA.

We think that Bausch + Lomb IPO provides investors an attractive event-driven, value investment story with significant upside potential over next three years (more than 100% percent) and could also become a buyout target.