They Refused to Fight for Russia. Employees with job insecurity could affect a spinoff's performance. I have no business relationship with any company whose stock is mentioned in this article. Bausch & Lomb ( NYSE: BLCO) is owned by 10.32% institutional shareholders, 89.01% Bausch & Lomb insiders, and 0.68% retail investors. Click here to find out more . BHC) shareholders are up 19% this past week, but still in the red over the last three years (Simply Wall St.) Dec-27-22 08:49AM: . Bausch Health stock was largely unchanged on the news, trading at $26.98 per share on Friday compared with Thursday's $26.75 closing share price. This gives investors an ample margin of safety while allowing for the potential of outsized gains. Active contributors also get free access to SA Premium. The main risk is that BHC won't be able to meet the bond covenants due to the current economic issues. In other words, as is the case with any investment, the risk of loss is present. Investing Club: We're sticking with troubled Bausch Health - CNBC will bhc shareholders get shares of blco - alanattard.com In finance, a stub is a security that is created as a result of a corporate restructuring such as a spin-off, bankruptcy, or recapitalization. Historically, spinoffs have performed well over the long-term. 2700.922%. Find the latest Bausch Health Companies Inc. (BHC) stock discussion in Yahoo Finance's forum. Bausch + Lomb Corp. (BLCO) Stock Price Today, News, Quotes, FAQs and Basic notes from Barron's article. FY2023 EPS Estimates for Bausch Health Companies Inc. Lowered by Zacks GX Acquisition Corp. - DEF 14A - Proxy Statement - May 01, 2023 It helps when a spinoff's management has a financial stake in the company through stock options or substantial equity positions. Cyber Warfare Examples 2021, Yet, a spinoff is often helmed by enthusiastic officers and managers who are motivated to see the value of their company and its stock emerge and grow. This is because highly levered firms provide tremendously skewed risk/reward opportunities. #Shares: Value ($) #Shares Total: SEC Form 4: Carson Seana: EVP, General Counsel: Feb 28: Sale: 9.32 . Bausch + Lomb Corp. | IPOScoop Bausch + Lomb is set to be one of the most intriguing initial public offerings this week, and investors are already gearing up for the BLCO stock IPO. However, BHC is already trading well below my conservative estimate of its post-spinoff value. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. The main risk is that BHC won't be able to meet the bond covenants due to the current economic issues. Bausch Health trades on the Nasdaq exchange under the ticker BHC. At this point if BHC can buy back enough debt in the open market at these prices, $0.40 on the $1, they will make up for the lost deleveraging of the patent decision going against them. BLCO stock has surged, while BHC stock is currently down approximately 3%. This is due to the fact that the parent company stock no longer reflects the value of the unit that was spun off. This price range would also allow it to raise $840 million. A wholly owned subsidiary of Bausch Health (the "Selling Shareholder") sold 35,000,000 common shares at a public offering price of $18.00 per share for aggregate gross proceeds of $630 million, before deducting underwriting commissions and estimated offering expenses. I arrived at this terminal multiple by comparing BLCO to Alcon Inc. (ALC) and Hoya Corp. (7741). The two companies opened during a slow time for new issues. Keep a close eye on Bausch + Lomb this week. Thus far, BHC has not yet IPOed Solta Medical and has only sold 10% of its stake in BLCO. The methodology for Cramer's valuation was based upon Bausch and Lomb's competitor Alcon trading at 22.4x 2021 EBITDA, and given that he projected BLCO's EBITDA at $947 million (which turned out to be $821 million in actuality), he applied the same multiple and arrived at a market cap of $21.1 billion. Revenue for the quarter ended March 31 totalled US$1.92 billion, down from US$2.03 billion in the same period last year. Because BHC's EBITDA independent of BLCO at about $2 billion a year (which can be arrived at by subtracting BLCO's and Solta Medical's respective $900 million and $100 million in EBITDA from BHC's $3 billion in EBITDA), a multiple of 12 suggests an EV of $24 billion and with $20 billion of debt, a market cap of $4 billion which is not a far cry away from the aforementioned current market cap of $3.63 billion. The drop can be due to parent company shareholders selling their spinoff shares. Accordingly, BLCO stock will be an interesting one to watch from here. If BHC can get it's leverage down and meet bond covenants, BHC can complete the spinoff by issuing the remaining 80% of the BLCO shares to BHC shareholders. The BHC spinoff of BLCO took place on May 6 at $20 a share, giving it a market capitalization of $7 billion. BHC.TO - | Stock Price & Latest News | Reuters So I used an extremely conservative 10-year DCF assuming FCF of $1 billion, 0% growth, a 10% discount rate and terminal multiple of 6 (assuming FCF was used to pay down debt, there would be roughly $10 billion left in total liabilities) would yield an intrinsic value of $8.46 billion (or more than 2.3x the current market capitalization). Due to stock price volatility, spinoffs can underperform in weak markets and outperform in strong markets. The 12-month stock price forecast is 22.95, which is an increase of 39.60% from the latest price. Chris Schott thinks Bausch spin-off would do $870MM . To be held June 14, 2023 . August 27, 2020 - Update. The underwriters will get an option of purchasing an additional 5.25 million common shares of Bausch + Lomb within 30 days. On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. And what else do you need to know? The big news from the earnings report today is diluted earnings per share of -19 cents. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. As an independent company, the spinoff may focus more effectively on its own operations and flourish. Shareholders who prefer stability could choose to take profits by selling spinoff shares in an uptrend and continue to hold their company shares. The reported loss of $0.19 per share missed analysts' expectations for a gain of $1.03, however. Fitch assumes that administrative claims consume 10% of this value in the recovery analysis. Today, investors have yet another stock to add to their watchlists. However, the EV/EBITDA multiple for the industry is approximately 12. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Also today, Bausch Health notified the Trustee and holders of its outstanding 9.000% Senior Notes due 2025 that the conditions to its previously announced conditional redemption of such notes would not be satisfied, and the conditional redemption was cancelled. I can't believe that this has . For those interested about this IPO, lets dive into a few things to know. In fact, the early bumps in the road with which any new company must contend are enough to scare off some investors. The story would be different if we were investment bankers incentivized to justify valuations, but we are investors tasked with determining absolute, not relative, value. Zacks Research Comments on Bausch Health Companies Inc.'s Q1 2024 This downtrend can generally be attributed to market turbulence due to macro factors. Forward-looking StatementsThis news release may contain forward-looking statements about the Bausch + Lomb and Bausch Health, which may generally be identified by the use of the words "anticipates," "hopes," "expects," "intends," "plans," "should," "could," "would," "may," "believes," "subject to" and variations or similar expressions, including statements about Bausch + Lomb's ability to comply with the financial and other covenants contained in the Bausch + Lomb Credit Agreement and Bausch Health's ability to comply with the financial and other covenants contained in the Second Amendment to the Existing Credit Agreement. Because, in my view, these multiples are unwarranted for companies with a collective prospective CAGR of 4%. Spinoff Leverage Details ir.bauschhealth.com. Bausch + Lomb's IPO plans come into focus as BHC prepares to split into The eye health products company is a wholly-owned subsidiary of Bausch Health Companies Inc. (TSX:BHC), and reports of its IPO plan had started surfacing last year. It's 52-week high is $30.01, and it is down more than 85% . It can also be calculated by dividing the company's Market Cap by the Net Profit. Price Target $22.95 ( 39.60% upside) Analyst Consensus: Buy Stock Forecasts News All Videos Press Releases Conversation Recall, that one key issue plaguing BHC is a roughly $20 billion net debt load on the balance sheet. For those unfamiliar, Bausch + Lomb is a popular maker of contact lenses and eyecare products. Shareholders should be aware of the price dip that typically happens to the parent company stock price after a spinoff. Dissenting shareholders obstacle to Daum, Kakao merger Back to BHC Overview. (NYSE: BLCO) has been in the works for some time . Bausch + Lomb is widely considered the crown jewel held within the Bausch Health portfolio. Historically, spinoffs have been good investments for investors. Investors. View real-time stock prices and stock quotes for a full financial overview. That's a 9.3% decline. Furthermore, my valuation of Solta Medical, which is set to be IPOed and sold entirely by BHC, is approximately $2 billion. We have now voided the risk of underperformance of BLCO's core business negatively affecting investor sentiment by performing an unduly conservative valuation of it. The number of shares that a parent company shareholder receives is based on the number they own in the parent company. This valuation of $8.4 billion comes from upper end of the Bausch + Lomb IPO price range of $21-$24. Solta Medical is relatively much smaller. Ltd., a wholly owned subsidiary of Bausch Health Companies Inc. ("BHC"). Bausch Health (BHC) moves ahead with eyecare unit spin-off Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. A wholly owned subsidiary of Bausch Health (the "Selling Shareholder") sold 35,000,000 common shares at a public offering price of $18.00 per share for aggregate gross proceeds of $630 million . Bausch Health Cos. Inc. BHC, -0.30% filed for an initial public offering of its Bausch & Lomb Corp. unit on Thursday, with plans to list on the New York Stock Exchange, under the ticker "BLCO." In my calculations, BLCO generates normalized, levered FCF of approximately $650 million per year for BHC. According to 17 analysts, the average rating for BLCO stock is "Buy." That's nowhere close to the $1.29 per share that Wall Street was expecting the company to report. Zacks Research Comments on Bausch Health Companies Inc.'s Q1 2024 Institutional Holdings information is filed by major institutions on form 13-F with the Securities and Exchange Commission. Solta will get valued at around $2-$4 billion depending on what multiple is given to a fast-growing (~37% CAGR 2018-2020) aesthetic medical devices with ttm EBITDA of ~150 million. . When terms of the deal were released in late April . This comes on a rather mixed day in the markets. Bausch Health's eye health business, Bausch + Lomb, which launched its initial public offering ("IPO") and subsequently began trading under the ticker "BLCO" on May 6, 2022, expects the IPO to close today, May 10, 2022. Public competitors like Alcon (ALC) trade at a multiple of 21+. BHC | Complete Bausch Health Cos. Inc. stock news by MarketWatch. And if BHC were to progressively unload its share of BLCO at current market conditions and used the proceeds to extinguish debt it would eliminate over $5 billion in debt. Bausch + Lomb Corporation Announces Launch of IPO and Roadshow - Bausch Health Companies Inc. stock plummeted by a quarter Tuesday morning after the company missed earnings expectations and lowered its outlook for the year. BLCO stock has surged, while BHC stock is currently down approximately 3%. However, it is better to have a margin of safety to minimize the downside. While this approach may have worked in 2021, the momentous multiple correction we are witnessing in the capital markets right now makes me uncomfortable with assigning such a multiple to a company with an anticipated 4% market growth rate. A spinoff is created when a company forms some part of its operations into a new entity and issues stock in it to parent company shareholders. Market cap, also known as market capitalization, is the total market value of a company. Bausch Health files for Solta IPO as its 3-way split nears completion -pdf- HypeZero provides individual investors with investment ideas that have historically been proven to outperform the market. Bausch + Lomb is widely considered the crown jewel held within the Bausch Health portfolio. Bausch Health shares plunge amid spin-off, weaker outlook The common shares are expected to begin trading on the NYSE and on an "if, as and when issued basis" on the TSX on May 6, 2022, in each case under the ticker symbol "BLCO." Chris MacDonalds love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. As a spinoff, the newly restructured division may exceed its past performance when part of the parent company and boost financial gains. Today, it appears the. Here's where I'm at Scan this QR code to download the app now. BHC Bausch Health Companies Inc - Stocktwits Bausch and Lomb IPO does not happen due to market conditions or get a lower valuation than our $16 billion estimate. By Julie Randall FED NOTES: Originally published in the Spring 2016 edition of Bank Owner magazine. Editor's note: Seeking Alpha is proud to welcome Matthew Fry as a new contributor. Why Bausch Health Is Down More Than 24% Today Assuming management monetizes the additional 8.7% at $15.66, they should be . The plunge of $4.04, or 24.08 per cent, to $12.74 in late-morning trading on the Toronto Stock Exchange came on the final day of its initial public offering for eye-products maker Bausch + Lomb, which debuted Friday on the TSX and New York Stock Exchange and will operate as a separate company after trading closes Tuesday. That's nowhere close to the $1.29 per share that Wall Street was expecting the company to report. What makes this company so intriguing? Bausch + Lomb IPO: When and where can you buy BLCO stock? Of course, there are a multitude of alternate paths this restructuring could take, but even given the poorest outcome for shareholder value, namely no BLCO distribution, shareholders will still be left with a much more attractive holding than they bought. Almost any post related to stocks is welcome on /r/stocks. Get in Now on Tiny $3 Forever Battery Stock, Early Bitcoin Millionaire Reveals His Next Big Crypto Trade On Air, BLCO Stock: 7 Things to Know About the Bausch + Lomb IPO Today, Analyst Expectations for Bausch & Lomb's Future, Bausch + Lomb Corporation (BLCO) Gets a Buy from H.C. Wainwright, Cortigent, developer of human vision restoration devices, files for $17M IPO, Benzinga's Top Ratings Upgrades, Downgrades For March 9, 2023, The Latest Analyst Ratings for Bausch & Lomb, RBC Capital Sticks to Their Buy Rating for Bausch + Lomb Corporation (BLCO), Morgan Stanley Sticks to Its Hold Rating for Bausch + Lomb Corporation (BLCO), Analysts Offer Insights on Healthcare Companies: United Therapeutics (UTHR) and Bausch + Lomb Corporation (BLCO), Registration on or use of this site constitutes acceptance of our, Yesterday, it was announced that Bausch + Lomb would be pricing its IPO at. Some investors, especially those with higher risk profiles, are attracted to spinoffs for the growth opportunities that the new, smaller companies offer. BLCO Stock: 7 Things to Know About the Bausch - Insider In addition, we will provide investors access to all the research and tools that allow us to generate these ideas. So, in the words of legendary fund manager Mohnish Pabrai, this is a "heads I win, tails I don't lose much" scenario. However, a FCF multiple of 16 for an entrenched business with strong brand recognition, consistent revenues, and 4% CAGR seems reasonable. Conglomerates: Cash Cows or Corporate Chaos? will bhc shareholders get shares of blco. ALC and Hoya Corp.'s respective forward FCF to market cap ratios average out to slightly >30. Bausch & Lomb files for IPO with plans to list on NYSE under ticker 'BLCO' As Bausch Health is the entity. In such a case, a spinoff can help by allowing the parent company to put its efforts to better financial use. Its now singular focus on its own core operations can lead to profitability and a higher stock price. A wholly owned subsidiary of Bausch Health (the "Selling Shareholder") sold 35,000,000 common shares at a public offering price of $18.00 per share for aggregate gross proceeds of $630 million . BHC - Bausch Health Companies Inc. - Stock screener for investors and traders, financial visualizations. The . Other institutions may sell because the spinoff doesn't meet their investment criteria. Given our conservative estimates, BHC gives substantial upside with minimal downside risk. Depending on their point of view, such a time could offer existing shareholders the opportunity to buy or sell parent company shares. Bausch Health Companies Inc is the largest individual Bausch & Lomb shareholder, owning 310.45M shares representing 88.70% of the company. Bausch + Lomb Corp. priced its IPO at $18 a share Thursday, falling short of expectations as it became the first big company in months to try going public into a turbulent stock market.. Bausch . In connection with the IPO, Bausch Health entered into its previously announced Second Amendment (the "Second Amendment") in respect of its existing credit agreement (the "Existing Credit Agreement"). Bausch Health Companies Inc's Bausch & Lomb shares are currently valued . Parent company shareholders shouldn't be concerned by this price change because they own the spinoff's shares as well. Carl Icahn's 13F portfolio value increased from $21.23B to $21.75B this quarter. On CNBC's "Mad Money Lightning Round," Jim Cramer said Bausch Health Companies Inc. (NYSE:BHC) is "one of the worst picks I've had. The company's current CEO, Joseph Papa, who took over 5 years ago has cleaned up the company by settling the legal cases and reducing debt by ~$10 billion to $22 billion. GameStop Forecast: Can GME Stock Prove the Skeptics Wrong in 2023? Bausch Health reported a loss of US$69 million in its first quarter compared with a loss of US$610 million a year earlier when it took a goodwill impairment charge in its Ortho Dermatologics business. While I believe relative valuation is an important tool, I also believe that industry multiples can occasionally be at the whim of Mr. Market's emotions as well. The stock dive also came after the Quebec-based firm, which keeps its books in U.S. dollars, notched down its guidance to between US$8.25 billion and US$8.40 billion in revenue for 2022 from US$8.40 billion and US$8.60 billion previously. 2023 InvestorPlace Media, LLC. However, it. Luckily, BLCO's current market cap is well in excess of BHC's at $5.95 billion. The focus on innovation has helped to grow the top line. The highly anticipated Bausch + Lomb(NYSE:BLCO) initial public offering (IPO) is now a reality, and BLCO stock is now trading. Bausch + Lomb Corp market cap is $6.11B. Nevertheless, spinoffs generally do well in the long term. The differences and why they matter for investors The offering is for 35M shares. Get the latest Bausch Health Companies Inc. (BHC) stock price, news, buy or sell recommendation, and investing advice from Wall Street professionals. Generally speaking, after early price drops, spinoff stocks strengthen and offer a positive performance for several years. View real-time stock prices and stock quotes for a full financial overview. Such a relative valuation is, in my view, inappropriate. On August 6, 2020, Bausch Health Companies Inc. announced that it intends to spin off its leading eye health business into an independent publicly traded entity ("Bausch + Lomb - NewCo") from the remainder of Bausch Health. Baxter bids adieu to $5B kidney care division with spinout plan. BLCO Stock: 7 Things to Know About the Bausch + Lomb IPO Today Check out our wiki to learn more! Seeking Alpha's Disclosure: Past performance is no guarantee of future results. This price range would also allow it to raise $840 million. I have no business relationship with any company whose stock is mentioned in this article. Bausch + Lomb remains on track to spin off from Bausch Health, following the expiry of customary lock-ups related to the IPO . Copyright 86% of retail CFD accounts lose money, Stock Prodigy Who Found NIO at $2 Says Buy THIS. The big news from the earnings report today is diluted earnings per share of -19 cents. All rights reserved. But, if you believe that, as Charlie Munger says, "all intelligent investing is value investing," then this technical overhang may create an even more attractive buying opportunity not just for BLCO stock but for BHC as well.

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