Valeant Pharmaceuticals International Inc.’s $8.7 billion deal for Bausch & Lomb Holdings Inc., the eye-care company owned by Warburg Pincus LLC, positions Canada’s largest drugmaker to compete globally in the growing, specialized ophthalmology market.

The deal’s value includes $4.2 billion that Valeant will use to pay off Bausch & Lomb debt, the companies said in a statement. Bausch & Lomb, bought by Warburg in a 2007 leveraged buyout, filed in March for an initial public offering after an earlier effort to sell itself for at least $10 billion stalled, people familiar with the matter said at the time.

The Bausch & Lomb deal is the largest of 15 publicly announced acquisitions for Montreal-based Valeant since it was created in a 2010 merger of its U.S. predecessor and Canada’s Biovail Corp. Chief Executive Officer Mike Pearson’s strategy has been to mix large and small deals and focus on areas such as dermatology and eye care.

“Ophthalmology has been an area we’ve been talking about probably for three years,” Pearson said yesterday in an interview. “It’s an area we like a lot. It’s a lot like dermatology -- a growing market, a growing specialty.”

Valeant will finance the deal with about $1.5 billion to $2 billion in new equity and debt secured from Goldman Sachs Group Inc., the companies said in the statement.

Valeant rose 10 percent to C$95.85 yesterday at the close in Toronto, the highest price since 1987. Its U.S. shares gained 13 percent to $84.47 in New York on May 24, its highest price since 1994.

The purchase will add to Valeant’s earnings per share immediately, according to the statement the companies released yesterday. Valeant expects to achieve at least $800 million in annual cost savings by the end of next year, the companies said. Valeant’s existing eye-care businesses will be added to Rochester, New York-based Bausch & Lomb to create a division that will have pro forma 2013 revenue of more than $3.5 billion, according to the statement.

“Valeant will restructure the business but it will also have to invest, put some fuel in the machine, otherwise Bausch & Lomb will have trouble keeping up with eye-care companies such as Alcon,” said Eric Le Berrigaud, a health-care analyst at Bryan Garnier & Co. in Paris, in a telephone interview.

Alcon is the ophthalmology and eye-products division of Basel, Switzerland-based Novartis AG. The Swiss drug giant completed its acquisition of Alcon in April 2011 and reported $10.2 billion in sales from the division last year, according to data compiled by Bloomberg.

Valeant will have about 18,000 employees once the deal is complete, Pearson said. The number of jobs that may be eliminated to reduce overlap and duplication hasn’t been determined, he said. Bausch & Lomb spends about 40 percent of revenue on selling, general and administrative expenses and Valeant aims for about a 20 percent ratio, Pearson said.

“There’s many, many non-personnel savings here as well,” Pearson said. “We can get better distribution fees in different markets. There’s a lot of purchasing synergies. There’s a lot of real estate synergies.”

Valeant has a wide range of drugs, including the antidepressant Wellbutrin XL, over-the-counter products and medical devices. The company reported $3.5 billion in 2012 revenue and had $413.7 million in cash and near cash as of March 31, according to data compiled by Bloomberg.

Bausch & Lomb generated $3 billion in 2012 sales of its products such as contact lenses, eye-care solutions and prescription medicines, with more than 40 percent of the revenue coming from North America, filings show. Eye products don’t require a large sales force and are often bought with cash, Pearson said. The Bausch & Lomb deal also helps diversify Valeant’s product line out of dermatology, he said.

Valeant last month was said to be in talks to merge with Parsippany, New Jersey-based Actavis Inc., the largest U.S. generic-drug maker, according to people familiar with the matter. Actavis on May 20 said it agreed to buy Warner Chilcott Plc for about $5 billion.

Pearson declined to say whether Valeant had sought Actavis. The company makes about 25 deals a year, including small purchases that don’t have to be reported. While it won’t rule out other deals as it digests Bausch & Lomb, it’s “not our intention” to make another of that size, Pearson said.

“We’ll never say never,” he said. “The rest of this year we’ll be largely focused on excellent integration of this deal.”

Valeant’s largest purchase to date was a $2.4 billion deal for Medicis, a skin-care company, after it failed in 2011 to buy drugmaker Cephalon Inc. with a bid of about $5.7 billion.

Valeant’s most recent deal before Bausch & Lomb was an April purchase of Obagi Medical Products Inc., the maker of prescription skin-care products, for about $418 million.

Valeant’s legal advisers were Skadden, Arps, Slate, Meagher & Flom LLP and Osler, Hoskin & Harcourt LLP. Cleary, Gottlieb, Steen & Hamilton LLP was legal adviser to Bausch & Lomb, with Goldman Sachs and JPMorgan Chase & Co. as financial advisers.

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