Market Overview

Johnson & Jonhson Unit Could Fetch Over $4 Billion in Sale

Johnson & Jonhson Unit Could Fetch Over $4 Billion in Sale

Johnson & Johnson's (NYSE: JNJ) Ortho Clinical Diagnostics unit is up for sale and two potential buyers are willing to pay $4 billion. Reuters reported that Danaher (NYSE: DHR) has joined forces with Blackstone Group (NYSE: BX) to bid for the unit that makes blood screening equipment and laboratory blood tests. The tests can reveal viruses like HIV and hepatitis C and can also reveal a patient's blood type.

The Danaher-Blackstone partnership is one of many offers that are on the table. Other bidders for the unit include well-known private equity firms such as Bain Capital, Carlyle Group (NASDAQ: CG), BC Partners and a partnership of CVC Capital Partners and Leonard Green & Partners. Johnson & Johnson was hoping to collect $5 billion from the sale, but people close to the sale are placing a $4 billion valuation on the unit, according to Reuters.

Reuters reported that the Dow component is seeking a new round of bids by November 11. The unit has annual sales of about $2 billion and is considered a smaller player compared to its competitors such as Roche Holding AG, Siemens AG, Abbot Laboratories (NYSE: ABT) and Danaher.

J.P. Morgan Chase (NYSE: JPM) is acting as advisor to the company who has been exploring strategic alternatives for the unit since January. Johnson & Johnson is following the lead set by rival, Pfizer (NYSE: PFE), who spun off its animal health products business earlier this year.

Shares of Johnson & Johnson were trading slightly higher, up 0.8 percent. Danaher shares were up as much as 3.5 percent, hitting new historical highs of $74.38 a share.

Posted-In: News Retail Sales


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