United States headquartered pharmaceutical and medical equipment giant Johnson & Johnson (J&J) is rarely far from the news in terms of buyouts and mergers & acquisitions, and they have become the subject of one of the first big buyouts of 2014. J&J have sold their Ortho-Clinical Diagnostics unit to Washington D.C. headquartered Carlyle Group, reported by the New York Times Dealbook.
The total deal value is reported to be $4.15billion. A source with knowledge of the deal told the New York Times that around $3.3billion of the deal is debt, with the remainder from Carlyle Group’s huge $13billion fundraiser that held its final close in November 2013. Negotiations have been on-going for weeks, as reported by the same source, and the deal represents a great result for Carlyle given they were a relative latecomer to the party, with many companies bidding to complete the buyout following J&J announcing their intention to sell earlier in the year.
The Ortho-Clinical Diagnostics unit is a profitable business, but not a particularly fast growing one. J&J are focusing on maximising their faster growing business areas for now, hence their decision to sell of this unit. Carlyle has previous when it comes to medical and healthcare investments, with high value acquisitions of Pharmaceutical Product Development and ManorCare in recent years.
In a statement related to the acquisition, Stephen Wise of Carlyle said, “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 unit is headquartered in the state of New Jersey but has operations in place around the world, and is known as a global leader in research into blood testing and treatments in this specific field.