ISTA to be Acquired by Bausch & Lomb

It was revealed on Tuesday that Bausch & Lomb has agreed to acquire ISTA Pharmaceuticals (NASDAQL ISTA). According to Market Watch, Bausch & Lomb swooped in with a higher offer for the eye-care company less than two hours after a deal collapsed with a rival company. After the news was released, ITSA saw its shares jump 7.8% to $9.03 after hours, which is just below Bausch & Lomb's $9.10 per-share offer price. Still it offers more than $380 million for ISTA's outstanding shares. The numbers value the company at an approximately 134% premium over the December 15 close, which comes the day before ISTA confirmed that it is weighing up its options. Bausch & Lomb's offer comes after Valeant Pharmaceuticals VRX felt compelled to withdraw its own improved offer for ISTA. ISTA said that it would continue to review Valeant's offer, valued at up to $353 million, but also said that it would keep talking to other interested parties. Bausch & Lomb's deal has the unanimous approval of both company's boards, and the two companies will operate independently until the deal closes. On Tuesday, Auriga published a research report stating that Bausch & Lomb, the global eye care company, and ISTA Pharmaceuticals, today announced that they have signed a definitive agreement under which Bausch + Lomb will acquire ISTA for $9.10 per share in cash, or a total of ~$500 million. “The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2012. We view the $9.10 acquisition price as being reasonable and expect the deal to close uneventfully.” The report also said that Auriga spoke with the CFO, Lauren Silvernail after the announcement and were able to confirm that the due diligence by Bausch & Lomb has been completed. FTC clearance and shareholder votes are two key events before the deal is closed. “We view these two events are likely to be favorable and there is little risk remaining in closing the deal by Q2 of 2012. It has been a great ride for the past four months for the ISTA shares and we expect the rest of the rides to be rather uneventfully with the share price trading within a narrow range of Bausch & Lomb's offering price.”