This article discusses the history and potential sale of Bausch + Lomb (B+L), a Rochester-based company founded in 1853 through a handshake agreement between John Jacob Bausch and Henry Lomb. The company grew into a successful American business but struggled in the 1990s when "professional managers" prioritized personal gains over the company's long-term vision. After a series of problems including accounting issues, the company was taken private in 2007 by Warburg Pincus. It is now being shopped for sale, which the author argues does not bode well for Rochester due to potential job losses and loss of a Fortune 500 headquarters.

1. Democrat and Chronicle Sunday, January 13, 2013
It started with a simple handshake in
1853 between John Jacob Bausch and
his friend Henry Lomb. Lomb loaned
Bausch $60 to start an optics company
with the promise that if it grew they
would become full partners.
This handshake gave birth to Bausch
+ Lomb, a great American business
success story until the early 1990s,
when the company was derailed by
reckless ambition. Warren Buffett once
said that if you demand your exec-
utives “make their numbers,” they
eventually will “make up their num-
bers.” That happened at B+L and that is
when the vision, and spirit, of Messrs.
Bausch and Lomb left the company.
Now there’s word the company is
being shopped, with the assistance of
Goldman Sachs. Considering the cur-
rent chairman and CEO of B+L were
successfully involved in selling the
large pharmaceutical company Scher-
ing Plough to Merck in 2009 for $41
billion, a sale is likely to happen, which
does not bode well for Rochester. I have
no criticism of these executives as they
carry out a plan that private equity
firm Warburg Pincus implemented
when it took the company private in
October 2007.
So what went wrong and what can
we learn? After rereading press re-
ports and SEC filings from the
mid-1990s through October 2007, an
unsettling but familiar story line
emerged. Professional managers more
concerned by what they might get ver-
sus what the company might eventually
become led the company over the cliff.
When managers don’t share the foun-
ders’ passion and vision and act accord-
ingly, a corporate cancer begins to
metastasize. This deadly culture pre-
sents itself in overstating revenue,
accounting irregularities causing the
restatement of financial results, a
board asleep at the switch and a hand-
ful of reported lesser transgressions,
punctuated with a keen ability to ratio-
nalize failure. From 1993 to the sale in
October 2007, B+L touched them all.
Typically, successful company foun-
ders are forged in the crucible of sur-
vival, including its hardships, scarcity,
and a deeply rooted appreciation for
workers that they view as colleagues.
Their company is an extension of, or is,
their family, and they still make the
difficult decisions. Their greatest satis-
faction comes from seeing others suc-
ceed — in many circumstances beyond
what the individual worker believed
was possible. The company trappings
of success are understated with defer-
ence given to the public shareholders.
They worry about obsolescence and
have a burning desire for innovation.
“Professional managers” void of a foun-
ders’ DNA have brought many a great
company to its knees.
So 140 years of success was eroded
and Bausch + Lomb became a private
equity play. We can only hope, though
unlikely, that the bids are not attrac-
tive, and Warburg Pincus takes the
company public again, with steward-
ship inspired by the vision of Messrs.
Bausch and Lomb.
If not, I am afraid the loss to Roches-
ter, and B+L employees, could be sig-
nificant, including a 10 percent to 15
percent reduction in redundant posi-
tions, loss of community financial sup-
port and the loss of a Fortune 500 com-
pany headquarters — all marked by a
rose-colored tombstone downtown once
called the Bausch + Lomb building.
Backinthemid-1990s,whenMarkGentilewasstartinghissoftwarebusiness,potentialinvestorsremindedhimthat
manystartupsfail.Theyaskedabouthisbackupplan.» “Naively,Isaid,‘Failureisnotanoption.’Andeveryonekindof
chuckled,” said Gentile, who sold his company, Odyssey Software Inc., to California-based Symantec Corp. last year. »
His attitude epitomized the confidence and spirit that permeates the world of entrepreneurship, where men and wom-
en risk everything to pursue their dream. They have a drive and a decisive ability that separates them from the rest of
us 9-to-5ers, according to experts. » Gentile’s feeling that he didn’t need a Plan B was ingrained. » “It was part of that
outlook that there’s always solutions to any problem. It’s that kind of outlook that allowed me to navigate the tricky
waters of starting and growing a business and not becoming one of the statistics,” said Gentile, now a senior technical
directorforSymantecinthesameHenriettaofficewhereheworkedbeforethesale.» Thesalepricewasnotdisclosed.
See ENTREPRENEURS, Page 5E
Bennett J. Loudon staff writer
Mark Gentile
Possible B+L sale not good news for Rochester