Carlyle Offers To Buy Johnson & Johnson Ortho-Clinical Diagnostics For $4.15 Bln

(RTTNews) - Healthcare giant Johnson & Johnson (JNJ) Thursday said it has received a binding offer from Carlyle Group to acquire its Ortho-Clinical Diagnostics business for $4.15 billion.

Alex Gorsky, chairman and CEO of Johnson & Johnson, said, "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."

Ortho Clinical Diagnostics makes tests that can reveal a patient's blood type and screen for viruses like HIV and hepatitis C. It also makes tests that help diagnose a heart attack and detect heart injury.

The unit, with annual sales of about $2 billion, has more than 2,500 employees worldwide. It has manufacturing operations in Rochester, New York, Pompano Beach, Florida, and Cardiff, Wales.

Johnson & Johnson, like other major drug makers, has been divesting non-core businesses and cutting costs amid generic competition. It was in January 2013 that Johnson & Johnson said it was initiating an exploratory process to evaluate strategic options for the Ortho Clinical Diagnostics business.

At that time, the company noted that the unit "could have greater potential from operating as part of another organization whose focus was more closely aligned to its core strengths, or as a stand-alone company".

Reports had indicated last month that private equity giant Carlyle was in exclusive talks to buy Johnson & Johnson's blood-testing unit in a deal expected to be worth about $4 billion.

It was reported then that Carlyle emerged from several bidders as the most likely to acquire the unit. The company's offer was seen by Johnson & Johnson as superior to a rival bid from private equity giant Blackstone Group (BX) and industrial conglomerate Danaher Corp. (DHR).

Johnson & Johnson said today that the acceptance period for the offer would end on March 31, unless extended. During that time, the company will consult with relevant works councils and trade unions.

If the offer is accepted by the company, the proposed deal is expected to close toward the middle of the year.

The company said it would further discuss the contemplated transaction during its scheduled quarterly earnings meeting on January 21.

In a separate statement, Stephen Wise, Managing Director of The Carlyle Group, said, "Ortho-Clinical Diagnostics is an established global brand with a reputation for quality and innovation. 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.''

The firm said equity for the transaction comes from Carlyle Partners VI, a $13 billion U.S. buyout fund. The fund completed fundraising in November 2013 with two hundred sixty-nine investors from 43 countries.

JNJ closed up around 0.1 percent on Wednesday at $94.80.