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Bausch + Lomb sells more than 400 products in more than 100 countries and will have a market capitalization of approximately $8.2-billion.Ryan Remiorz/The Canadian Press

Pharmaceutical company Bausch Health Companies Inc. BHC-T is finalizing the sale of a stake in eye-care division Bausch + Lomb Corp. through a US$788-million initial public offering, taking a major step toward unwinding past management’s acquisition spree.

This week, the Laval, Que.-based company is planning to sell about 10 per cent of its eye-care business at between US$21 and US$24 per share. A successful listing for Bausch + Lomb on the Toronto and New York stock exchanges at the mid-point in that range – US$22.50 per share – would qualify as the largest TSX IPO and the second largest NYSE IPO done so far this year.

Bausch + Lomb sells more than 400 products in more than 100 countries and will have a market capitalization of approximately $8.2-billion. In a report on Monday, IPO-focused investment bank Renaissance Capital said: “While it faces significant competition from other brands and generic products, the company is highly profitable with strong cash flow, and it has global brand awareness.”

Bausch Health used to be called Valeant Pharmaceuticals International Inc., and former chief executive Michael Pearson acquired Bausch + Lomb in 2013 for US$8.7-billion, one in a series of acquisitions largely financed with debt. Valeant subsequently faced regulatory probes over its business practices, including price hikes on its drugs, and Mr. Pearson departed in 2016.

A few months later, Joseph Papa took over as CEO of Bausch Health and put a priority on paying down debt and focusing the company on a stable of pharmaceuticals. In addition to an IPO at the eye-care unit, Bausch Health is spinning off skincare division Solta Medical Corp. through a listing on Nasdaq.

After the IPO, Mr. Papa will be CEO of Bausch + Lomb, while the parent company’s current president Thomas Appio will be the new CEO of Bausch Health and Scott Hirsch will run Solta.

Morgan Stanley Canada Ltd. and Goldman Sachs Canada Inc. are leading the Bausch + Lomb IPO, and there are no Canadian-based investment banks in the company’s underwriting group, which is unusual for a TSX-listed offering.

Bausch + Lomb is debuting on public markets after a freeze this winter in what had been a red-hot market for IPOs. In February, a downturn in growth-focused stocks, rising interest rates and the Russian invasion of Ukraine combined to spook investors.

Going in to 2022, U.S. social-media platform Reddit and driver-assistance pioneer Mobileye were preparing multibillion-dollar IPOs, as were a number of smaller Canadian technology companies. Those plans are now largely on hold. The largest IPO done so far this year came from private equity firm TPG Inc., which raised US$1-billion in January. TPG’s stock price has subsequently declined by 23 per cent.

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