Bausch + Lomb valued at US$6.5 billion after shares rose on NYSE debut

Bausch + Lomb was valued at US$6.48 billion in its US market debut on Friday (May 6) as shares of the eye care company opened nearly 3% above an offer price which was well below the target range.

The modest reception from investors comes in a gloomy year for US capital markets and underscores the challenges facing Reddit and Mobileye, Intel’s self-driving car unit, which are in the process of going public.

Fears over the Ukraine conflict and a more aggressive outlook for the Federal Reserve to tighten policy have forced several companies in recent months to postpone or shelve plans to go public in the United States.

“Yesterday’s sell-off was an exceptionally bad time to price an IPO, so in a sense it’s impressive that (Bausch + Lomb) closed the deal,” said Matt Kennedy, senior strategist at the research firm. IPO Renaissance Capital.

“In this environment, investors need a much higher margin of safety. I think most companies are re-evaluating their IPO plans after the market crash this week.”

Major US stock indexes sank more than 3 percent on Thursday on concern that even the Fed’s biggest interest rate hike since 2000 would not be enough to rein in rising inflation. They also traded lower on Friday.

Bausch + Lomb shares opened at US$18.50 compared to the IPO price of US$18, which was well below the company’s target range of US$21 to US$24.

The initial public offering raised $630 million for the selling shareholder, a unit of Bausch + Lomb’s parent company, Bausch Health Companies. None of the proceeds went to Bausch + Lomb, according to his filing.

The offering was the second largest this year after the IPO of private equity giant TPG, which raised nearly $1 billion in January.

Bausch + Lomb, based in Vaughan, Ontario, was founded in 1853 as a small optical store in New York and made the lenses used in the cameras that took the first satellite image of the moon.

During World War II, the company manufactured sunglasses for the US Army. Bausch + Lomb was also behind the luxury eyewear brand Ray-Ban, but sold that business to Italy’s Luxottica Group in 1999.

The company manufactures contact lenses, eye drops and ophthalmic pharmaceuticals and has a portfolio of more than 400 products that are sold in nearly 100 countries.

The company was first listed on the New York Stock Exchange in 1958, but was then taken private by Warburg Pincus in 2007.

Morgan Stanley and Goldman Sachs were the main underwriters of the offering.

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