Carlyle Group Wants to Buy J&J Blood Screening Division For $4.16B

NEW BRUNSWICK, NJ—The Carlyle Group, a global private equity investment firm based in Washington, D.C. will be offering $4.16 billion to Johnson and Johnson for its blood testing and diagnostics unit.

The offer was announced in a press statement made by the NJ-based pharmaceutical giant on January 16.

Blood testing and diagnostics, which includes transfusion technology and donor screening for diseases such as HIV, is run by Ortho-Clinical Diagnostics, Inc. (OCD), a Raritan-based business that as of January 2013 had generated $2.07 billion in revenue.

The OCD unit forms J&J’s Medical Devices and Diagnostics Operations (MD&D), which along with the consumer health and pharmaceutical branches, is one of the three divisions that make up Johnson and Johnson.

The MD&D unit generated $27.4 billion of J&J’s $67.2 billion in revenue in 2012 alone, and is among the largest medical technology entities in the world.

Started in 1987, the Carlyle Group previously purchased several military contractors, as well as major brands including Dunkin Donuts and Hertz rental cars. 

In the bidding for OCD, Carlyle was able to prevail over two separate partnerships, the first being between the Blackstone Group and Danaher Corp., and the second being between CVC Capital Partners and Leonard Green & Partners.

OCD was put on the market in January 2013, and had several groups bidding for it by the time J&J and the Carlyle Group opened dialogue about an offer in December.

Had J&J not sold the blood screening unit, the window for purchase would have expired on March 31.

Come mid-2014, when the acquisition is expected to be finalized, Carlyle Group will operate OCD as a standalone entity with a large degree of independence.

The Carlyle Group has announced plans to pour resources heavily into research and development, and international markets once that acquisition has taken place.

In 2007, the firm took over the nursing home operation, ManorCare.  In 2011, they bought out Pharmeceutical Product Development Inc., a "global contract research organization providing drug discovery, development, lifecycle management and laboratory services."