Exclusive: Carlyle near deal to buy J&J diagnostics unit - sources

NEW YORK Mon Dec 23, 2013 4:44pm EST

A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012. REUTERS/Jonathan Ernst

A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012.

Credit: Reuters/Jonathan Ernst

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NEW YORK (Reuters) - Private equity firm Carlyle Group LP (CG.O) is nearing an agreement to acquire Johnson & Johnson's (JNJ.N) ortho clinical diagnostics unit, four people familiar with the matter said on Monday, in a deal expected to be worth around $4 billion.

Carlyle is in exclusive talks with Johnson & Johnson after prevailing over a rival bid from Blackstone Group LP (BX.N) in partnership with healthcare and industrial conglomerate Danaher Corp (DHR.N), the people said, cautioning that negotiations were ongoing and the outcome could change.

A deal is expected to be reached within the next two weeks, one of the sources said.

The exact price of Carlyle's offer could not be learned. The sources asked not to be identified because details of the sale process are confidential.

Carlyle, Johnson & Johnson and Blackstone declined to comment. A Danaher representative did not immediately respond to a request for comment.

J&J's ortho clinical diagnostics unit makes blood-screening equipment and laboratory blood tests. It also makes tests that can identify a patient's blood type and screen for viruses such as HIV and hepatitis C.

The unit is a small player in a market led by larger rivals such as Roche Holding AG (ROG.VX), Siemens AG (SIEGn.DE), Abbott Laboratories (ABT.N) and Danaher.

Johnson & Johnson said at the beginning of the year it would explore strategic alternatives for the unit and said the process could take from 12 to 24 months. It asked JPMorgan Chase & Co (JPM.N) to run the sale of the unit, Reuters previously reported.

Johnson & Johnson's decision to divest the division comes as drugmakers are shedding businesses and cutting costs in response to overseas price controls and pressure on payments from insurers and the government.

Pfizer Inc (PFE.N), for instance, recently spun off its animal health products business, and Abbott split off its branded drugs unit early this year.

(Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Andrew Hay and Leslie Adler)

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Comments (2)
SKYDRIFTER wrote:
Okay, what are Daddy Bush & the Gang up to, this time?

(Or, should everyone have forgotten?)

Dec 23, 2013 4:41pm EST  --  Report as abuse
GeorgeBMac wrote:
Kind of sad… But increasingly common…

US industry was NOT built by financial wizards buying up businesses whose business they know nothing about (and do not care to learn).

It was built by people like Carnegie who’s passion, wisdom and know how built successful, thriving empires…

And, instead of valuing, nurturing and growing the business as these people did, the primary goal of the financial conglomerants is to milk the business for its income and cash.

This may not be the primary failure of America today, but it is certainly a symptom of America’s slow decline into mediocrity…

Dec 24, 2013 7:08am EST  --  Report as abuse
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