After a brief courtship that first took flight late last year, the Carlyle Group has made a binding offer of $4.15 billion to acquire Ortho-Clinical Diagnostics (OCD), the in vitro diagnostics business unit of diversified healthcare giant Johnson & Johnson.

Still one of the largest providers of solutions for screening, diagnosing, monitoring, and confirming diseases—the company generated revenues of $2.16 billion in 2012—OCD has been overshadowed in recent years by growing competition from Abbott, Danaher, Roche, and Siemens. J&J officials made it known early last year that they were interested in shedding the unit, in part due to its failure to grow more rapidly.

OCD is headquartered in Raritan, NJ, with manufacturing operations in Rochester, NY, Pompano Beach, FL, and Pencoed, Wales. The company serves hospitals, clinical laboratories, and the transfusion medicine community around the world, operating in 130 countries.

Gorsky“Ortho-Clinical Diagnostics plays an important role in healthcare, and we’re confident that it’s well positioned to serve the interests of its patients, customers, and employees,” said Alex Gorsky, chairman and CEO of Johnson & Johnson. “This transaction is a result of our disciplined approach to portfolio management in order to achieve the greatest value for Johnson & Johnson.”

The Carlyle Group is a global alternative asset manager headquartered in New York City. Carlyle has expertise in a variety of industries, including defense and government services, financial services, healthcare, technology and business services, and telecommunications and media. At the end of last September, the group had $185 billion of assets under management across 122 funds and 81 fund-of-funds vehicles.

“Ortho-Clinical Diagnostics is an established global brand with a reputation for quality and innovation,” said Stephen H. Wise, managing director of the Carlyle Group. “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.

“We have been focused on the diagnostics industry for many years given its attractive growth prospects, driven by the crucial role it plays in healthcare decision-making and influencing patient outcomes,” Wise added. “We believe that OCD, with its world-class employee base and talented management team, is poised for the next level of success.”

Eric Compton, worldwide president of OCD, said, “We are excited to work with Carlyle and believe OCD will be well-positioned as an independent company focused exclusively on the in vitro diagnostics market. In combination with Carlyle’s global reach and deep experience in the healthcare sector, OCD 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.”

The acceptance period for the offer will end on March 31, 2014, unless extended, and during that time Johnson & Johnson will consult with relevant works councils and trade unions. If the offer is accepted by Johnson & Johnson, the proposed transaction would be expected to close toward the middle of the year, pending fulfillment of anti-trust clearances and other customary closing requirements.

Equity for the transaction comes from Carlyle Partners VI, a $13 billion US buyout fund that completed fundraising in November 2013 with 269 investors from 43 countries. Since its inception, Carlyle has invested $6.3 billion of equity in healthcare transactions around the globe. Current and former investments include: Pharmaceutical Product Development (PPD), Grupo Qualicorp, Healthscope Limited, HCR ManorCare, and MultiPlan.

Barclays and Goldman Sachs are acting as financial advisors to the Carlyle Group, which has secured committed debt financing from Barclays, Goldman Sachs, Credit Suisse, UBS, and Nomura. Latham & Watkins LLP is acting as legal advisor to the Carlyle Group.

For further information, visit the websites for Ortho-Clinical Diagnostics and the Carlyle Group.