Bausch & Lomb (NYSE:BOL) is one of the best-known names in eye care. There's good reason for this brand recognition: In the U.S., the Rochester, N.Y.-based company continues to have a large market share in contact lenses and other eye-care products.

Nevertheless, Bausch & Lomb recognized long ago that it needed to expand overseas to keep growing. Last year, 37% of its sales came from Europe and 20% came from Asia. Today, the firm demonstrated its continuing drive to diversify, with a deal that will add an important component to its operations in the Asian market.

Bausch & Lomb announced that it will buy a 55% stake in China's Shandong Chia Tai Freda Pharmaceutical Group (CTF) for $200 million. In addition, Bausch & Lomb has entered into a pact to purchase an additional 15% of the company at a later date for $54.5 million. The deal is just one of many that multinationals have sealed in recent years, as they look to enhance their footing in China. The market is bidding up Bausch & Lomb shares more than 5% on the news. Investors are no doubt excited by the prospects of being a bigger player in the burgeoning Chinese market.

The deal does, indeed, look promising for Bausch & Lomb. The company is no stranger to China. It makes contact lenses there and sells products for refractive and cataract surgeries in that market. At the moment, though, the eye-care giant's pharmaceutical business in Asia is small. Most of the $525 million in revenue from its 2004 pharmaceutical sales came from the U.S. and Europe. The CTF purchase should alter this mix for the better.

As for the price tag, at 18.6 times earnings, Bausch & Lomb seems to be getting its money's worth. CTF's compound annual growth rate has exceeded 20% since 2001, and Bausch & Lomb will get access to a local distribution network, sales professionals, and a manufacturing facility that meets stringent Food and Drug Administration (FDA) Good Manufacturing Practice (GMP) standards.

Perhaps most important, Bausch & Lomb is projecting the purchase will add $0.05 to $0.10 per share to earnings in 2006, and $0.10 to $0.15 per share in 2007. No doubt Bausch & Lomb will continue to face fierce competition from rivals like Johnson & Johnson (NYSE:JNJ). But CTF looks like a worthy addition.

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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.