Valeant Pharmaceuticals International, based in Quebec, will acquire Rochester, N.Y.-based Bausch + Lomb, the global eye health company, for $8.7 billion in cash.

Bausch + Lomb operates in three segments: Pharmaceutical (including prescription brands, generics and OTC), Vision Care (contact lenses and solutions) and Surgical (intraocular lenses and surgical equipment). Its brands include Besivance, Lotemax, Ocuvite and PreserVision; vision care brands Biotrue ONEday, PureVision, renu and Boston; and surgical brands enVista, Storz, Stellaris and VICTUS.

Valeant will pay aggregate consideration of $8.7 billion in cash, of which approximately $4.5 billion will go to an investor group led by Warburg Pincus and approximately $4.2 billion will be used to repay Bausch + Lomb's outstanding debt. Valeant expects to achieve at least $800 million in annual cost savings by the end of 2014. Bausch + Lomb expects to have revenues of approximately $3.3 billion and adjusted EBITDA in 2013 of approximately $720 million. The transaction is expected to be immediately accretive to Valeant's cash earnings per share. The transaction will be financed with debt and approximately $1.5 billion to $2 billion of new equity.

Bausch + Lomb will retain its name and become a division of Valeant. Valeant's existing ophthalmology businesses will be integrated into the Bausch + Lomb division, creating a global eye health platform with estimated pro forma 2013 net revenue of more than $3.5 billion. The acquisition positions Valeant to capitalize on growing eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets.

Bausch + Lomb CEO Brent Saunders will join Valeant in an advisory role to help ensure a seamless transition and integration, and Fred Hassan, chairman of Bausch + Lomb's board of directors, will join Valeant's board.