NORTH CHICAGO, Ill. (AP) -- Medical products and drug maker Abbott Laboratories said Monday it is buying Advanced Medical Optics Inc. for about $1.36 billion plus debt to expand its eye-care offerings, including laser vision correction.
North Chicago, Ill.-based Abbott's $22-per-share offer is more than double Santa Ana, Calif.-based Advanced Medical's Friday closing price of $8.85. Including debt, the deal is worth about $2.8 billion.
Both companies' boards have approved the deal, which will take place through a tender offer. Abbott said the buyout would have no significant effect on earnings in 2009 and would add to profit in 2010.
The companies expect the deal to close in the first quarter.
"Through superior vision care technologies and service, Advanced Medical has established itself as a leader in this multi-billion dollar medical device segment," Abbott Chairman and Chief Executive Miles D. White said in a statement. "With Advanced Medical, Abbott is enhancing and strengthening its diverse mix of medical device businesses and gaining a leadership position in another large and growing segment."
The company reaffirmed its 2008 profit guidance of $3.31 to $3.33 per share, excluding certain items. It expects profit between $3.65 and $3.70 in 2009. Analysts polled by Thomson Reuters expect profit of $3.32 in 2008 and $3.66 in 2009.
Advanced Medical makes eye care products, along with devices for cataract surgery and laser-vision correction. In a statement, the companies said population growth and demographic shifts are increasing demand for vision care, with about 60 percent of people older than 60 having cataracts.
In May 2007, the company recalled its Complete MoisturePlus Multi-Purpose contact lens solution, after it was linked to cases of an eye infection. Sales of the multipurpose solution have since rebounded for the company. A year earlier, Bausch & Lomb Inc. recalled its ReNu with MoistureLoc multipurpose cleaner because it was also linked to eye infections.
Private equity firm Warburg Pincus bought Bausch & Lomb in 2007 for $3.67 billion, but not before getting an unsolicited bid from Advanced Medical. The company eventually withdrew its $4.2 billion cash-and-stock offer after saying Bausch & Lomb put up unrealistic hurdles.
