J&J receives private equity offers for diagnostics unit -sources

Reuters

By Soyoung Kim, Greg Roumeliotis and Jessica Toonkel

NEW YORK, Sept 30 (Reuters) - Some of the world's largestprivate equity firms have made preliminary offers for Johnson &Johnson's Ortho Clinical Diagnostics unit, which makesblood screening equipment and laboratory blood tests and couldfetch around $5 billion, several people familiar with the mattersaid on Monday.

Blackstone Group LP, KKR & Co LP, BainCapital LLC, Carlyle Group LP and BC Partners Ltd areamong the buyout firms that submitted first-round bids last weekand are waiting to hear back this week on who made theshortlist, the sources said.

The people spoke on condition of anonymity because they werenot authorized to discuss details of the process publicly.Johnson & Johnson and Carlyle did not respond to requests forcomment while Blackstone, KKR, Bain and BC Partners declined tocomment.

The unit for sale, whose tests are considered older and lessprofitable than modern molecular diagnostics, has annual salesof about $2 billion.

Healthcare conglomerate J&J said in January it would explorestrategic alternatives for the unit and cautioned that theprocess could take anywhere from about 12 to 24 months. It askedJPMorgan Chase & Co to run the sale of the unit, peoplefamiliar told Reuters earlier this month.

J&J's decision to divest the division comes as drugmakersare shedding businesses and cutting costs in response tooverseas price controls and pressure on payments from insurersand the government.

Pfizer Inc, for instance, just spun off its animalhealth products business, and Abbott Laboratories splitoff its branded drugs unit early this year.

TPG is one private equity firm not participating in J&J'sauction, the people said. TPG acquired a competing provider ofblood testing products, Immucor Inc, for $1.97 billion in 2011.A TPG spokesman declined to comment.

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