Johnson & Johnson selects two bidders for diagnostics unit sale

By VCPOST Staff Reporter

Nov 21, 2013 04:23 PM EST

Carlyle Group LP and a combined group from Danaher Corp and Blackstone Group LP have successfully advanced to the final stage of sale negotiations for J&J's diagnostics unit, according to sources familiar to the matter. Although J&J stated in January that it would still explore other strategic alternatives for the unit and the process could take anywhere from 12 to 24 months.

The two chosen bidders are both willing to pay for the majority of the unit, Ortho Clinical Diagnostics, through a deal valued at $4 billion, less than the original value tagged at $5 billion.

Other private equity firms whom have stopped negotiating due to considering the valuation as too high, consisted of Bain Capital LLC, BC Partners Ltd, and a combined group of Leonard Green & Partners LP and CVC Capital Partners Ltd.

The diagnostic unit that has been placed on sale produces blood screening equipment that can reveal a patient's blood type and screen for viruses such as heptitis C and HIV, and laboratory blood tests that are considered impractical and less profitable than modern molecular diagnostics. A smaller player in a sense compared to bigger rivals such as Roche Holdings AG, Siemens AG, Abbott Laboratories and Danaher.

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