LAVAL, Que. — Bausch Health Companies Inc. says it plans to pursue an initial public offering of its medical aesthetics business as part of structural changes to unlock the pharmaceutical company's value.
The Quebec-based company says the IPO of Solta Medical, which had 2020 revenues of US$253 million, should take place in the fourth quarter or first half of 2022, depending on market conditions.
The announcement came as Bausch reported deeper net losses in its latest quarter despite a 26 per cent increase in revenues.
Bausch says its net loss attributable to shareholders was US$595 million or US$1.66 per diluted share in the second quarter, compared with a loss of US$326 million or 92 cents per share a year earlier.
Excluding one-time items such as legal settlement costs, the adjusted net profit more than doubled to US$352 million from US$165 million in the second quarter of 2020.
"Our second quarter 2021 results demonstrate impressive overall company growth as our businesses continue to recover from the COVID-19 pandemic," stated chairman and CEO Joseph Papa.
Revenues for the three months ended June 30 were US$2.1 billion, up from US$1.66 billion in the prior year due to increased sales volumes resulting from the recovery from the COVID-19 pandemic.
That included US$934 million from Bausch + Lomb and US$1.17 billion from Bausch Pharma, up from US$677 million and US$987 million, respectively, a year earlier.
Bausch was expected to earn US$359.4 million in adjusted profits on US$2.12 billion of revenues, according to financial data firm Refinitiv.
"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," added Papa.
Bausch trimmed its 2021 revenue and earnings outlook to reflect the sale of Amoun Pharmaceutical Company to Abu-Dhabi Based ADQ for about US$740 million.
It now expects revenue to be US$200 million lower to between US$8.4 billion to US$8.6 billion and full-year adjusted earnings before interest, taxes, depreciation and amortization to be US$50 million lower to reach US$3.35 billion to US$3.5 billion.
The heavily indebted Bausch repaid US$500 million of debt in the first half of 2021 and has no maturities until 2025.
The public offering would transform Bausch into three companies: the Bausch + Lomb eye health company, Bausch Pharma and Solta.
Scott Hirsch, who is president of Ortho Dermatologics and OraPharma at Bausch has been appointed CEO of Solta and former chief financial officer Paul Herendeen will be chairman following the IPO.
Solta will be based in Canada and be listed on Nasdaq.
Thomas Appio will head Bausch Pharma following the spinoff of Bausch + Lomb.
Douglas Miehm of RBC Dominion Securities said in a report that there could be some disappointment about the Solta IPO in that all management appointees were from within the company.
He added Solta could be sold off to reduce Bausch's debt ahead of the Bausch + Lomb spinoff and generate about US$1.8 billion.
This report by The Canadian Press was first published Aug. 3, 2021.
Companies in this story: (TSX:BHC)
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