Reuters: Mergers News: TEXT-S&P:Bausch & Lomb deal for Ista will not affect rtgs

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TEXT-S&P:Bausch & Lomb deal for Ista will not affect rtgs Mar 28th 2012, 12:41 Wed Mar 28, 2012 8:41am EDT March 28 - Standard & Poor's Ratings Services said today that Rochester, N.Y.-based Bausch & Lomb Inc.'s (B+/Stable/--) definitive agreement to acquire Ista Pharmaceuticals Inc. for $500 million would not affect its ratings or outlook on the company. Bausch & Lomb intends to finance the acquisition with $350 million of debt and cash on hand. Pro forma, we estimate adjusted debt to EBITDA would remain under 5.5x, a slight increase from 5.1x at year end 2011. Bausch & Lomb has sufficient capacity to take on this incremental debt. The company performed above our expectations in 2011, with high-single-digit revenue growth and double-digit EBITDA growth over 2010. While vision care exhibited modest strengthening, overall performance continues to be driven by strong pharmaceuticals segment growth. However, we believe Bausch & Lomb may be stretched to make additional, investments, given its September 2011 agreement with Technolas Perfect Vision GmbH (TPV) for an option to purchase outstanding TPV shares, which could cause cash outflows to exceed cash inflows in the near term.

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