Bausch & Lomb shares rose on the first day of trading after the company was forced to cut the second-biggest listing of the year amid market volatility.
By early afternoon, the company’s shares were trading at $19.35 a share, a jump of 7.5 percent in early Friday trading, but still down from the $21 to $24 a share it had been looking for before lowering your ambitions.
Bausch & Lomb, the vision care unit of the company formerly known as Valeant Pharmaceuticals, was aiming to raise as much as $840 million Thursday night but ultimately sold at $18 a share, raising $630 million.north.
Joseph Papa, CEO of Bausch & Lomb, said the deal “marks a tremendous milestone for Bausch & Lomb and an important step forward on the path to becoming an independent company focused on eye health.”
Market volatility caused by rising interest rates and Russia’s war in Ukraine has caused a sharp drop in US stock prices this year, with just $3.3 billion raised, compared with more of $56 billion in the same period in 2021, according to data from Dealogic.
Gas group Excelerate successfully raised $384 million last month, although it benefited from an exceptionally positive environment for energy companies. Observers have been closely watching Bausch’s outlook as a more representative test of investor appetite.
The bankers hoped that the long history of profitability of Bausch & Lomb, which began as an optical store in upstate New York in the 19th century, would serve them well. However, the planned initial public offering coincided with a sharp turn in the broader stock market. Wall Street’s benchmark S&P 500 index fell 3.5 percent on Thursday.
Bausch & Lomb reported revenue of $3.8 billion in 2021, up 10% from 2020 but broadly flat compared to 2019. Net income was $193 million, though its earnings will fall as it inherits some of the debt as part of separation from its parent company. .
Valeant spent $8.7 billion to buy Bausch & Lomb from private equity group Warburg Pincus in 2013, when it was on a long acquisition spree. The Canadian company later changed its name to Bausch Health after a series of scandals involving predatory pricing and accounting irregularities.
Bausch Health will remain a majority shareholder of Bausch & Lomb after the deal. He has said he intends to sell or distribute his stake to shareholders, although the newly independent company warned in its prospectus that its parent was “under no obligation” to complete the distribution.
The prospectus also highlighted Bausch & Lomb’s exposure to the war in the Ukraine. It generated $116 million in revenue in Russia last year, as well as smaller amounts in Ukraine and Belarus, and said it faced risks including lower demand, possible future sanctions, state-sponsored cybersecurity attacks and reputational damage. for continuing to operate in the region. .