As part of its typical trimming of family businesses, Johnson & Johnson started reviewing strategic options for its Ortho-Clinical Diagnostics business last year (a blood testing unit that services hospitals, testing laboratories and blood banks). In 2012, the diagnostics business reported revenue of $2.1 billion—down more than four percent from the previous year. The first nine months of 2013 proved to be even worse after revenue fell by eight percent.
Now J&J has announced that The Carlyle Group is expressing serious interest in that piece of business by offering $4.15 billion for it.
Ortho-Clinical Diagnostics currently operates in more than 30 countries worldwide and employs over 4,500 workers. While J&J has stated it plans to consult the works councils and trade unions representing the employees’ best interests before moving forward, the final decision will undoubtedly come down to what offers the most value for lenders and stakeholders. And if the sale goes through, The Carlyle Group will look to expand the business through increased marketing and new products.
Acquisitions of this kind tend to go hand-in-hand with an extensive list of issues that must be addressed. J&J has until March 31st to discuss them all and decide whether or not to accept the offer.