Johnson & Johnson has been offered $4.15 billion by private equity firm The Carlyle Group to buy its Ortho-Clinical Diagnostics (OCD) business.
It is not signed and sealed, but current signs point to the deal being completed in the middle of the year.
J&J’s division offers its services to hospitals and laboratories, specialising in in vitro diagnostics, and Carlyle believes it is hitting on an area which has great potential.
“Through accelerated investment in research and product development and continued expansion into both emerging and established markets, we expect to tap into rising demand for sophisticated medical diagnostic products and services worldwide,” said Carlyle managing director Stephen Wise.
OCD’s HQ is in New Jersey, but it also has manufacturing sites in New York, Florida and Pencoed, Wales.
“Ortho-Clinical Diagnostics plays an important role in healthcare, and we’re confident that it’s well positioned to serve the interests of its patients, customers and employees,” said Alex Gorsky, chairman and chief executive officer of J&J.
The sale was evidence of J&J’s ‘disciplined approach to portfolio management’, he added.
Carlyle has put $6.3 billion of equity into healthcare-related deals worldwide: last year it bought Nottingham, UK-based pharma packaging specialist Chesapeake, which has more than 20 manufacturing facilities in the US, Europe and Asia serving pharma customers.
Other deals include Pharmaceutical Product Development (PPD), Grupo Qualicorp, Healthscope, HCR ManorCare and MultiPlan.
“We have been focussed on the diagnostics industry for many years given its attractive growth prospects, driven by the crucial role it plays in health care decision-making and influencing patient outcomes,” Wise said.
“We believe that OCD, with its world-class employee base and talented management team, is poised for the next level of success,” he added.
J&J has until 31 March to accept the offer from Carlyle, and is expected to consult with employees and unions during this ‘acceptance period’.
OCD president Eric Compton said: “In combination with Carlyle’s global reach and deep experience in the healthcare sector, OCD will have the opportunity to invest in new, innovative products and services for its customers.
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