Allergan, Lens Maker Finally See Eye to Eye : International Hydron Accepts Bid on 2nd Try
Allergan Pharmaceuticals of Irvine plans to enter the contact lens manufacturing business with the acquisition of International Hydron for more than $155 million.
The proposed transaction marks at least the fourth attempt by Allergan’s parent, SmithKline Beckman Corp., to enter contact lens manufacturing through an acquisition.
The deal would give Allergan, an eye- and skin-care products subsidiary, “a complete line of eye-care services and products” that will “help drive” its sales of contact lens accessories and solutions, Allergan President William C. Shepherd said.
Allergan has been among the few companies in its industry that has not supported its product lines by making lenses, said Joseph Riccardo, managing director of Bear, Stearns & Co., a New York securities firm.
“Basically, it’s a company which has been an important factor in all facets of eye care,” Riccardo said. “And calling on ophthalmologists and optometrists and not being in a worldwide (soft lens) market approaching $1 billion is ridiculous.”
Previous Deal Collapsed
In addition to $155 million in cash, shareholders of Woodbury, N.Y.-based International Hydron will receive royalties from a bifocal lens patent and equity interests in three Chinese lens-making ventures it founded. Martin M. Pollak, chief executive and president of International Hydron, valued the patent and equity interests at more $1 million.
Allergan first tried to buy International Hydron three years ago for $162 million, but the deal fell through when the companies could not agree on final terms. In March, 1985, Allergan again tried to enter the contact lens business by buying American Optical, but that was blocked by the Federal Trade Commission. A few weeks ago, Allergan pursued Revlon Group’s Vision Care contact lens business, but lost out to British glassmaker Pilkington PLC.
Cash from the sale should provide a shot in the arm for National Patent Development, a New York company that owns 90% of International Hydron. National Patent has lost money for almost three years, recently reporting a $7.8-million loss for the first half of 1987.
International Hydron last year reported net income of $3.5 million on sales of $67 million. Holders of the 10% of the company that is publicly traded would receive about $10.35 a share. The stock closed at $9.75 on the American Stock Exchange on Tuesday, up 12.5 cents.
