Novartis will officially spin its Alcon eye-care business off into a separately-traded standalone business unit on April 9. Shares of the company, once located in Fort Worth, Texas, will begin to sell on the New York Stock Exchange that day, as well as on the SIX Swiss Exchange, Novartis announced this morning.
Current Novartis shareholders will receive one share of the new Alconbusiness for every five shares of Novartis owned. Alcon will trade under the ticker symbol ALC.
As Alcon steps out from underneath the Novartis umbrella, the company will be backed by a debt financing plan of $3.5 billion from a number of banks, the Swiss pharma giant said. Alcon has been given a credit rating of Baa2 and BBB, respectively by Moody’s Investor Service and S&P Global Ratings. The company has been given a stable outlook as well. Bank of America Merrill Lynch and UBS AG are advising Novartis on the transaction.
Novartis announced plans to spin Alcon off into a standalone business in June of last year. Spinning the company off will allow for both Novartis and Alcon to focus on individual growth strategies, Novartis said at the time. Novartis Chief Executive Officer Vas Narasimhan has been pushing the company for a more narrow focus on its pharmaceutical business and not medical devices or contact lens products, such as those developed by Alcon. Alcon was founded in 1947 in Fort Worth as a small ophthalmic pharmaceutical business. Novartis acquired Alcon in 2011 from Nestle for $52 billion. When Alcon was acquired by Novartis, the company’s business focus included surgical equipment, eye drugs and products such as contact lenses and eye drops. The medications have been shifted to Novartis’s pharmaceuticals unit and are expected to stay under the Novartis umbrella following the completion of the spinoff.
In September, it was announced that Alcon’s management would leave its longtime home in Texas for Switzerland, the home of Novartis. Alcon’s corporate headquarters is being moved from Fort Worth, Texas to Geneva, Switzerland. The Swiss city will be the primary home for Alcon’s senior corporate leadership and other corporate and commercial functions. The corporate headquarters will now be in the same place as Alcon’s Europe, Middle East and Africa regional office. At the time the decision to move the HQ to Switzerland was made, David Endicott, Alcon’s chief executive officer, said the site of the new headquarters will help “further increase Alcon’s global scale and reach to better serve our customers.”
Alcon’s current global divisional headquarters in Fort Worth will remain a major operational, commercial, and innovation hub for the company. In recent years Alcon has struggled with its sales but has recently seen some positive growth. Last year the company saw annual revenue of about $7 billion.
As Alcon prepares for the spinoff, earlier this week the company acquired fluid-based intraocular lens maker PowerVision Inc. for $285 million. Alcon said the acquisition of PowerVision demonstrates its commitment to “driving growth and innovation in advanced technology intraocular lenses (AT-IOLS) to meet the needs of cataract surgery patients who desire spectacle independence.”