Private equity firm The Carlyle Group LP (NASDAQ:CG) announced today that they were purchasing Johnson & Johnson (NYSE:JNJ)’s clinical testing division for $4.15 billion. Johnson & Johnson had been looking for a buyer for its testing division since early in 2013. They had been negotiating with as many as six suitors over the last few months, according to reports. The deal with Carlyle is anticipated to close by the middle of this year.
Terms of the deal between Carlyle and Johnson & Johnson
According to sources close to the deal, The Carlyle Group LP (NASDAQ:CG)’s purchase of Johnson & Johnson (NYSE:JNJ)’s Ortho-Clinical Diagnostics unit is being financed through $3.3 billion in debt and the remainder from the $13 billion in funds it raised from investors just a couple of months ago. Sources say Carlyle outbid The Blackstone Group L.P. (NYSE:BX), who weren’t willing to take their bid above $4 billion.
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Statement from Carlyle and Johnson & Johnson
Stephen H. Wise, a The Carlyle Group LP (NASDAQ:CG) managing director, described his firm’s intentions in buying the Johnson & Johnson (NYSE:JNJ) testing division in a statement released Thursday. “Through accelerated investment in research and product development and continued expansion into both emerging and established markets, we expect to tap into rising demand for sophisticated medical diagnostic products and services worldwide.”
“In combination with Carlyle’s global reach and deep experience in the health care sector, O.C.D. will have the opportunity to invest in new, innovative products and services for its customers and provide an environment for its professionals to excel in a competitive global marketplace,” said Eric Compton, the worldwide president of Ortho-Clinical Diagnostics.
Further details
Barclays PLC (NYSE:BCS) (LON:BARC) and Goldman Sachs Group Inc (NYSE:GS) provided financial advice to The Carlyle Group LP (NASDAQ:CG). Barclays, Goldman, Credit Suisse Group AG (ADR) (NYSE:CS) , UBS AG (NYSE:UBS) and Nomura Holdings, Inc. (ADR) (NYSE:NMR) worked together in committing debt financing. Latham & Watkins was Carlyle’s legal adviser. Johnson & Johnson (NYSE:JNJ) was advised by JPMorgan Chase & Co. (NYSE:JPM).
The Carlyle Group LP (NASDAQ:CG) was up two cents at $37.01 as of 12:16 PM ET Thursday.
Johnson & Johnson (NYSE:JNJ) was down 20 cents at $97.60 as of 12:17 PM ET today.