PE firms in race for J&J's Ortho Clinical Diagnostics unit
01 October 2013
A few private equity firms have tabled preliminary bids for Johnson & Johnson's (J&J) Ortho Clinical Diagnostics unit (OCD), which could fetch the US healthcare major around $5 billion.
Citing several people familiar with the matter, Reuters yesterday reported that Blackstone Group, KKR & Co, Bain Capital, Carlyle Group, and BC Partners are among the bidders who have submitted first-round bids last week and are waiting to hear back this week on who made the shortlist, the report said.
The New Jersey-based company had said in January that it would explore options, including a sale of its $2 billion a year OCD business.
''Options include a possible divestiture if it is determined that OCD could have greater potential as part of another organisation whose focus is more closely aligned with its core strengths, or by operating as a stand-alone company. At this time it is not certain that any transaction will be consummated,'' the company had said in a statement.
J&J hired JPMorgan Chase & Co to run the sale process and had sent financial data on OCD to potential buyers, including private equity firms.
OCD was created in 1994 after J&J acquired the Clinical Diagnostics Division of Eastman Kodak and formed Johnson & Johnson Clinical Diagnostics. It then merged with Ortho Diagnostic Systems in 1997.
OCD operates in two major segments: Transfusion Medicine involving screening human blood, development and commercialisation of instrument systems and reagents that screen blood for AIDS, Hepatitis and Chagas' disease.
It markets and develops instrumentation and reagent systems that enable blood typing, aimed at ensuring patient-donor compatibility in blood transfusions.
The other segment is Clinical Laboratories, which includes Clinical Chemistry - patented dry-slide technology and systems for use in stat and random access in-vitro diagnostic testing, and Immunodiagnostics – an enhanced chemiluminescence technology and systems that offers immunoassay testing capabilities for thyroid function, reproductive endocrinology, cardiology, anaemia, metabolism, oncology and infectious diseases.
Headquartered in New Jersey, OCD has a research and development center in Rochester, New York and annual revenues of $2 billion.
Other suitors for OCD would be its competitors like Washington-based Danaher Corp, Massachusetts-based Hologic Inc and Alere Inc.