Renu with MoistureLoc Maker Bausch & Lomb Acquired By Warburg Pincus For $3.67 Billion
Buyout Latest Fallout from Renu with MoistureLoc RecallOct 26, 2007 | Parker Waichman LLP
Bausch & Lomb, Inc., the maker of recalled Renu with MoistureLoc Contact Lens Solution, has been acquired by the private equity firm Warburg Pincus. Earlier today, Warburg Pincus announce that it had completed its $3.67 billion buyout of Bausch & Lomb, something that had been in the works since the spring.
Warburg Pincus has been a leading private equity investor since 1971. The firm currently has approximately $14 billion under management, and invests in a range of industries including information and communication technology, financial services and healthcare. Bausch & Lomb’s board of directors had agreed to the buyout in May, and in September, more than two-thirds of the company’s shareholders voted in favor of the takeover. Earlier this month, the CEO of Bausch & Lomb had voiced his hope that Warburg Pincus would be able to help the company “comeback from the difficulties of last year.”
Those difficulties stemmed from Bausch & Lomb’s Renu with MoistureLoc Contact Lens Solution recall in 2006. Renu with MoistureLoc had been linked to Fusarium Keratitis, a rare eye infection that has the potential to cause blindness. The company pulled Renu with MoistureLoc from Asian markets in February 2006, and did the same in the U.S. in April, before finally issuing a worldwide recall on May 15, 2006.
As of June 30, 2006, the Centers for Disease Control (CDC) had confirmed 164 cases of Fusarium Keratitis. The same report said that those infected with Fusarium Keratitis were 20 time more likely to have used the Renu with MoistureLoc solution. The CDC report determined that bad hygiene habits among users were not to blame for the infections, but that the contact lens solution appeared to have poor disinfectant qualities.
In October of 2006, the FDA issued a warning letter to Bausch & Lomb, criticizing the company for not reporting nearly three dozen infections linked to Renu with MoistureLoc that occurred before sales of the product were suspended. The letter also cited the company for numerous violations found during a May inspection of its Greenville, South Carolina manufacturing plant.
Bausch & Lomb now faces 573 product liability lawsuits stemming from the Renu with MoistureLoc recall. Analysts have estimated that Bausch & Lomb could face potential liabilities of as much as $1 billion over lawsuits stemming from the Renu with MoistureLoc debacle, although some have predicted that the amount will be much higher.
As result of the acquisition, Bausch & Lomb will no longer be a publicly traded company, a status it has held for over 69 years. Bausch & Lomb will be delisted from the New York Stock Exchange at the close of trading today, although Warburg Pincus has indicated that Bausch & Lomb could again become a publicly traded company within five to seven year.