Reports: Carlyle Group In Exclusive Talks To Buy J&J's Clinical Diagnostics Unit

(RTTNews) - Private equity giant Carlyle Group LP (CG) is in exclusive talks to buy healthcare giant Johnson & Johnson's (JNJ) blood-testing unit in a deal expected to be worth about $4 billion, according to media reports on Monday.

Washington, D.C.-based Carlyle has reportedly emerged from a number of bidders as the most likely to acquire the Johnson & Johnson unit, known as Ortho Clinical Diagnostics, Inc. The company's offer was seen by Johnson & Johnson as superior to a rival bid from private equity giant Blackstone Group (BX) and industrial conglomerate Danaher Corp. (DHR).

According to a report in the Wall Street Journal, Carlyle is said to be aiming to put more than $1 billion in cash toward a deal for Ortho Clinical Diagnostics, drawing from the $13 billion Carlyle Partners VI buyout fund that it closed in November 2013.

Raritan, New Jersey-based Ortho Clinical Diagnostics makes tests that can reveal a patient's blood type and screen for viruses like HIV and hepatitis C. It also makes tests that help diagnose a heart attack and detect heart injury. The unit, with annual sales of about $2 billion, has more than 2,500 employees worldwide. It has manufacturing operations in Rochester, New York, Pompano Beach, Florida, and Cardiff, Wales.

Johnson & Johnson, like other major drug makers, has been divesting non-core businesses and cutting costs amid generic competition.

In January 2013, Johnson & Johnson said it was initiating an exploratory process to evaluate strategic options for the Ortho Clinical Diagnostics business. At that time, the company noted that the unit "could have greater potential from operating as part of another organization whose focus was more closely aligned to its core strengths, or as a stand-alone company".

In early September, media reports indicated that Johnson & Johnson launched a sale process for the blood-testing unit. The company's advisers were said to have commenced talks with other health-care companies and private equity firms that were interested in buying the unit.

Johnson & Johnson, in mid-October, reportedly marginally higher earnings for the third quarter amid strong performance from several of its newly launched products.

The New Brunswick, New Jersey-based maker of Listerine antiseptic mouth-rinse, Acuvue contact lenses and Band-Aid said its net earnings attributable to the company rose to $2.982 billion from $2.968 billion in the previous year, while earnings per share edged down to $1.04 from $1.05. Sales increased 3 percent to $17.58 billion from $17.05 billion in the prior-year period.

JNJ closed Monday's trading at $92.03, down $0.06 or 0.07 percent on a volume of 5.32 million shares, while CG closed trading at $35.35, up $0.68 or 1.96 percent on a volume of 564,550 shares.