Bausch Health outlined plans to spin out its aesthetics devicemaker Solta Medical as it looks to further chip away at a mountain of debt on top of paying out $350 million to holders of outstanding senior notes this week.
Solta—shepherd of a $250 million division of dermatology-focused lasers and other hardware—will go public through its own Nasdaq IPO, now slated for the fourth quarter of this year or the first half of the next, according to the company.
The move will help Bausch Health pay down accounts ahead of a separate planned spinout of Bausch + Lomb, the legacy eyecare business it acquired for $8.7 billion in 2013, before ultimately taking its name for its 2018 rebranding.
Previously known as Valeant Pharmaceuticals, the company moved away from the tainted moniker after its stock dropped 90% from its peak following kickback schemes, prison time, billions in debt-laden acquisitions, congressional hearings and public pushback over pharmaceutical price hikes.
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The departure of the two aforementioned units will result in the establishment of three separate companies: the third being the drugmaker Bausch Pharma, which posted $1.17 billion in revenue for the second quarter of this year, an increase of 18% over the $987 million raised over the same period in 2020.
That includes $137 million supported by Solta’s brands, under the division’s ortho dermatologics segment. Meanwhile, Bausch + Lomb’s revenues were up 38%, to $934 million versus $677 million for the quarter.
"Our second quarter 2021 results demonstrate impressive overall company growth as our businesses continue to recover from the COVID-19 pandemic," Bausch Health CEO Joseph Papa said in a statement. "We saw strong performance with market share gains for many of our leading brands and strong cash flow generation in the quarter, which has enabled us to make great strides in reducing our debt."
Ahead of its IPO, Canada-based Solta got a new CEO: Scott Hirsch, Bausch’s chief strategy officer and president of ortho dermatologics and the dentistry-focused OraPharma outfit. In addition, former chief financial officer Paul Herendeen will serve as Solta’s chairman, after the company goes public.
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At the time, Bausch Pharma was given a new chief in CEO Thomas Appio, to be effective after the departure of Bausch + Lomb. Robert Spurr, president of the company’s Salix Pharmaceuticals arm, is set to serve as president of Bausch Pharma’s U.S. business.
Bausch Health reported $23.6 billion in total long-term debt obligations, with at least $10.5 billion coming due in 2025.