Last week’s announcement that private-equity owners had agreed to sell Bausch & Lomb Holdings Inc. to Valeant Pharmaceuticals International Inc. brought no expressions of shock or even great surprise.
Instead, the local reaction was disappointment-in part because Bausch & Lomb had been on the path to becoming a public company again-and pessimism about what this will mean for B&L employees and the community.
This is understandable. No one here will welcome the day when, after 160 years, Bausch & Lomb is no longer an independent, Rochester-based company.
But let’s not assume we know what lies ahead. Many people thought Warburg Pincus ownership would be devastating for Bausch & Lomb and the community. Yet has that really been the case?
Since 2007, Bausch & Lomb-unlike Eastman Kodak Co. and Xerox Corp.-has increased its local workforce. And as its recent S-1 filing shows, the company has increased revenues and improved its bottom line over the past three years.
The registration statement also underscores what B&L CEO Brent Saunders told the RBJ last summer: Bausch & Lomb six years ago was a company in need of a transformation. His focus, Mr. Saunders said, was to make up "for at least two and maybe three decades of lost innovation and opportunity" and "(build) the strongest company possible."
That Valeant is willing to pay $8.7 billion for Bausch & Lomb suggests this focus has been the correct.
Will Bausch & Lomb’s new owner stay on this course? So far, the signals have been mixed. Valeant CEO Michael Pearson told analysts he wants Bausch & Lomb’s vision care, surgical and pharmaceutical divisions to rise to No. 1 in their markets.
Yet he also said research and development would not be a big driver of B&L growth-and he thinks $800 million in cost savings can be achieved with the merged companies.
In the best-case scenario, Valeant with Bausch & Lomb will grow on a scale that neither firm could have achieved separately. Let’s hope that happens.
Meanwhile, our community must maintain its focus: developing a broad-based, innovative economy not dependent on the success of any single company.
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