J&J accepts $4 bn bid from Carlyle for its ortho-clinical diagnostics business

Johnson & Johnson (J&J) yesterday said that it has accepted a $4-billion takeover offer from private equity firm Carlyle Group for its ortho-clinical diagnostics (OCD) business.

J&J added that it accepted the offer after consulting with the relevant works councils and trade unions and the transaction is expected to close toward the middle of the year.

J&J had said in January that it would explore options, including a sale of its $2 billion a year OCD business.

It had hired JP Morgan Chase & Co to run the sale process and sent financial data on OCD to potential buyers, including private equity firms. J&J had received preliminary bids in late September and interim round bids in November.

Others in the final round of bidding were Blackstone Group and Danaher Corp with a joint bid, while CVC Capital Partners with its partner Leonard Green & Partners were also in the reckoning.

Carlyle bagged the blood-testing unit in January, and the acceptance period for the offer was to end yesterday.

OCD was created in 1994 after J&J acquired the Clinical Diagnostics Division of Eastman Kodak and formed Johnson & Johnson Clinical Diagnostics, which was then merged in 1997 with Ortho Diagnostic Systems.

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 Corp.

Headquartered in New Jersey, OCD, which operates in 130 countries and has manufacturing operations in New York, Florida and Wales, has annual revenues of around $2 billion.