Danaher, Blackstone Group jointly bid for Johnson & Johnson's diagnostics unit
08 November 2013
US science and technology company Danaher Corp has teamed up with private equity firm Blackstone Group to bid for Johnson & Johnson's (J&J) diagnostics unit, Reuters today reported, citing people familiar with the matter.
Danaher and Blackstone are competing against several private equity bidders for J&J's Ortho Clinical Diagnostics (OCD) unit, including Bain Capital, Carlyle Group, BC Partners, and a partnership of CVC Capital Partners and Leonard Green & Partners, the report said.
J&J had received preliminary bids in late September and is now seeking a new, interim round of bids by 11 November, the report added.
New Jersey-based J&J 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.
OCD competes with Roche Holding, Siemens AG, Abbott Laboratories and Danaher.
Headquartered in New Jersey, OCD has a research and development centre in Rochester, New York and annual revenues of $2 billion.
The sale may fetch the US healthcare major around $4 to $5 billion, according to analysts.