Bausch & Lomb, the global eye health company, has entered into a definitive agreement to acquire a 55-per cent controlling interest in the Shandong Chia Tai Freda Pharmaceutical Group (CTF), the leading ophthalmic pharmaceutical company in China, from Sino Biopharmaceutical Ltd.
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 per cent compared to the overall Chinese ophthalmic pharmaceuticals market growth of about 15 per cent during the same period.
"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," Bausch & Lomb Chairman and CEO Ronald L. Zarrella said adding, "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."
Bausch & Lomb derived $525 million, or 24 per cent 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.