Newsroom
China's Leading Ophthalmic Pharmaceuticals Company
FOR RELEASE Tuesday, July 5, 2005
ROCHESTER, N.Y. - Bausch & Lomb (NYSE:BOL), the global eye health company, has entered into a definitive agreement to acquire a 55-percent controlling interest in the Shandong Chia Tai Freda Pharmaceutical Group (CTF), the leading ophthalmic pharmaceutical company in China, from Sino Biopharmaceutical Ltd. (HKSE:1177.HK). The purchase price of $200 million in cash represents the equivalent of 18.6-times 2004 net earnings. The acquisition will accelerate Bausch & Lomb's expansion into the rapidly growing ophthalmic pharmaceuticals market in China.
In addition, Bausch & Lomb has
agreed in principle to a future acquisition of an additional 15-percent
interest in CTF held by two other entities, for $54.5 million, an amount
equivalent on a per-share basis to the price being paid to Sino
Biopharmaceutical Ltd.
The leader in the China ophthalmic pharmaceuticals market, CTF primarily develops, manufactures and markets medications used to treat ocular inflammation and infection, glaucoma and dry eye including the Moisten and Mioclear lines of eye drops. In 2004, CTF recorded sales of US$62 million. Since 2001, CTF has recorded compound annual growth of more than 20 percent compared to the overall Chinese ophthalmic pharmaceuticals market growth of about 15 percent during the same period.
Headquartered in the city of Jinan in Shandong Province, CTF has roughly 1,300 employees, with about half of them working in sales and marketing. CTF has an extensive national network of sales representatives and distributors that reach the country's hospitals and pharmacies.
"The acquisition of this well-known and respected local pharmaceutical company, combined with Bausch & Lomb's strong brand and longtime leadership in vision care products in China, will significantly enhance our presence in China's ophthalmic pharma market," said Bausch & Lomb Chairman and CEO Ronald L. Zarrella. "CTF will provide Bausch & Lomb access to a national network of pharmaceutical sales representatives and distributors, strong domestic brands, a GMP-certified manufacturing facility, and expertise in regulatory affairs and product development, all of which we view as a springboard for further growth in this strategically important market."
The acquisition is expected to close in the third quarter, subject to certain conditions including formal, final approval by the shareholders of Sino Biopharmaceutical, at which time asset valuation and purchase price allocations will be finalized. Based on preliminary estimates, the transaction is projected to be essentially neutral to 2005 earnings per share, five-to-10-cents-per-share accretive in 2006, and 10-to-15-cents-per-share accretive in 2007. These projections exclude transaction-related costs and customary purchase-accounting adjustments.
Bausch & Lomb derived $525 million, or 24 percent of its 2004 revenues, primarily from pharmaceutical products sold mainly in Europe and the United States. Bausch & Lomb, at its plants in China, makes and markets China's leading brands of contact lens and lens care products; the Company also sells its products for refractive and cataract surgeries in China.
Bausch & Lomb is the eye health company, dedicated to perfecting vision and enhancing life for consumers around the world. Its core businesses include soft and rigid gas permeable contact lenses and lens care products, and ophthalmic surgical and pharmaceutical products. The Bausch & Lomb name is one of the best known and most respected healthcare brands in the world. Founded in 1853, the Company is headquartered in Rochester, New York. Bausch & Lomb's 2004 revenues were $2.2 billion; it employs approximately 12,400 people worldwide and its products are available in more than 100 countries. More information about the Company can be found on the Bausch & Lomb Web site at www.bausch.com . Copyright Bausch & Lomb Incorporated.
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This news release contains, among other things, certain statements of a forward-looking nature relating to future events or the future business performance of Bausch & Lomb. Such statements involve a number of risks and uncertainties including, without limitation, those concerning global and local economic, political and sociological conditions, and the effect on economic, commerce, social and political systems caused by natural disasters (such as, without limitation, earthquakes, hurricanes/typhoons, tornadoes and tsunamis), currency exchange rates, government pricing changes and initiatives with respect to healthcare products, changes in laws and regulations relating to the Company's products and the import and export of such products, product development and rationalization, enrollment and completion of clinical trials, the ability of the Company to obtain regulatory approvals, the outcome of litigation, the ability of the Company to launch products within planned timeframes, the success of product introductions, the financial well-being of key customers, development partners and suppliers, the successful execution of marketing strategies, the continued successful implementation of the Company's efforts in managing and reducing costs and expenses, the Company's success in introducing and implementing its enterprise-wide information technology initiatives, including the corresponding impact on internal controls and reporting, the Company's success in the process of management testing, including the evaluation of results, and auditor attestation of internal controls (as required under the Sarbanes-Oxley Act of 2002), the continued successful execution of the Company's profitability improvement plans, continued positive relations with third party financing sources, as well as the risk factors listed from time to time in the Company's SEC filings, including but not limited to, the current report on Form 8-K dated June 14, 2002 and the Form 10-Q for the quarter ended March 26, 2005.
