J&J Accepts $4B Offer For Ortho-Clinical Diagnostics

By Ryan Brinks

Johnson & Johnson has agreed to sell off its Ortho-Clinical Diagnostics (OCD) business for $4 billion to The Carlyle Group LP. Carlyle was one of three bidders for the J&J business unit.

OCD makes in vitro diagnostic products and provides solutions for early screening, diagnosing, monitoring, and confirming diseases at hospitals, laboratories, and blood centers worldwide. It is expected to operate as an independent business for Carlyle, according to a Businessweek report. Last year it generated $1.89 billion in sales.

Acceptance of the binding offer made on Jan. 16 was announced on Monday, the deadline for the deal, after consultation with works councils and trade unions, J&J noted in a press release. The transaction is expected to close around mid-year, pending customary regulatory approvals.

When Carlyle made the offer in January, the global alternative asset management firm said the acquisition is anticipated to boost product innovation and growth.

“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 Stephen H. Wise, managing director of The Carlyle Group. “We have been focused 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. We believe that OCD, with its world-class employee base and talented management team, is poised for the next level of success.”

OCD, with more than 4,500 employees worldwide and operations in 130 countries, has most recently developed tests for vitamin D, prostate cancer detection and monitoring, and syphilis, according to USA Today's coverage of the deal.

For J&J, the move is another step toward the industry trend of concentrating on primary business operations, according to the Businessweek article. J&J offered OCD up for sale last November.

Offers for the division were also received from joint bidders Blackstone Group LP and Danaher Corp., as well as from CVC Capital Partners Ltd. and Leonard Green & Partners LP.