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Valeant Pharmaceuticals International Inc. CEO Michael Pearson is seen in one of the company's laboratories Tuesday, April 3, 2012 in Laval.

Ryan Remiorz/The Canadian Press

Pharmaceutical company Valeant Pharmaceuticals International Inc. will raise up to $2-billion (U.S.) in a secondary offering of its shares, most of which will be used towards its $8.7-billion purchase of eye care products company Bausch & Lomb Inc.

According to a prospectus for the issue, the Montreal-based company will issue $1.75-billion worth of shares, with an underwriters' option pushing the total to about $2-billion.

Valeant will also issue debt of about $7.5-billion to pay for the rest of the purchase price. Any leftover funds will be used for general corporate purposes, the prospectus says.

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If the share issue is done at roughly the current stock price – Valeant shares closed Monday at $86.30 (Canadian) on the Toronto Stock Exchange – it will have to issue about 23 million shares to raise the money. As of March 31, Valeant had about 304 million shares outstanding.

In the prospectus, Valeant said the purchase of Bausch & Lomb will give it "a leading global eye health company with an iconic brand, another strong specialty platform, an attractive late-stage pipeline and an expanded footprint across high-growth emerging markets."

The eye care market will "benefit from key global market trends including an aging population, increased incidence of diabetes and rising wealth in emerging markets," the document said. Bausch & Lomb had sales of about $3-billion (U.S.) in 2012.

Valeant will pay Bausch & Lomb's shareholders an investor group headed by private equity firm Warburg Pincus LLC – about $4.5-billion, and the balance will pay off the optical company's $4.2-billion debt.

Shareholders representing more than 90 per cent of Bausch & Lomb shares have signed a consent agreement saying they will tender to the Valeant offer, which was made on May 24.

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