Alcon
This article was originally published in The Tan Sheet
Executive Summary
Eye care firm will spend $1.4 bil. on R&D over next four years as an independent company following spin-off from Nestle. IPO prospectus filed with SEC Feb. 22 calls for sale of 69.8 mil. shares of common stock at $31-$35 per share by April; Nestle will receive all of the estimated $2.19 bil. in proceeds. Nestle's plan to sell a minority stake in Alcon, which controls approximately 18% of the $2.5 bil. market for contact lens care and other vision care products, is the second recent proposed spin-off of a major eye care player. In January, Allergan announced plans to spin off its contact lens care, ophthalmic surgical businesses (1"The Tan Sheet" Jan. 28, 2002, In Brief)...
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Contact lens care, ophthalmic surgical businesses will be housed in new publicly traded company, Advanced Medical Optics, under stockholder spin-off expected to be completed by July, Allergan announces Jan. 22. Company points to divergent market growth rates, gross margin leverage, R&D intensity as reasons for separating pharma, device businesses. Since complete separation of Rx, surgical and contact lens care sales forces in 1998, it has become "more obvious that limited synergies in the office of the eye practitioner are no longer sufficient reason for these businesses to operate within one enterprise," company states. Lens care sales fell 7% to $77.4 mil. in Q4, dropped 9.6% to $297.1 mil. for 2001, "impacted by the loss in the fourth quarter of certain private-label contracts with mass merchandisers," firm says...
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