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J&J ACQUISITION OF COOPERVISION UNIT IS FIRM'S FIRST EYE DRUG VENTURE

Executive Summary

Johnson & Johnson is paying roughly five times sales for a look-see into the U.S. eye care market via the purchase of CooperVision's ophthalmic pharmaceuticals business. J&J already has a presence in the device side of the business with IOLAB, a marketer of lenses. CooperVision announced in a Dec. 19 press release that the company had "reached an agreement in principle to sell its ophthalmic pharmaceutical products and business to J&J for approximately $260 mil. in cash." The CooperVision segment generated sales of about $55 mil. in fiscal 1986, the firm reported. J&J will be acquiring a predominantly Rx product line along with a few ethically promoted OTCs. Pilo-Car and Vasocon are among the major Rx products and Hypo-Tears is the dominant OTC. CooperVision's ophthalmic business employs about 700 people in two locations -- San German, Puerto Rico and San Jose, California. "Although CooperVision had not planned any additional divestitures at the time it had completed the sale of its orthopedics, Richards Medical, to Smith & Nephew for $284 mil. in October of this year," Chairman Parker Montgomery explained, "the proposed sale of the pharmaceutical business dies give the company an opportunity to concentrate all of its resources on its two remaining larger business groups: ophthalmic surgical group and contact lens and solutions group." CooperVision said it expects the proposed transaction to be finalized "on or before Dec. 31." The deal is also subject to the signing of a definitive agreement and the review and approval of the appropriate regulatory agencies, the release notes.
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