Johnson & Johnson's ($JNJ) sale of its Ortho Clinical Diagnostics arm to Carlyle Group appears imminent. Reuters reports that the global private equity firm is putting together a complex financing package that will allow the division to trade hands.
There's $3.7 billion in financing that breaks down into $2.15 billion in term loans and $1.15 billion in bonds, plus $300 million to $400 million in revolving credit. Factor in equity into the package, and the offer price will ultimately hit between $4.1 billion and $4.5 billion, sources told Reuters.
So when will the deal close? The answer appears to be "soon, but not now." According to the Reuters story, the transaction could be finished by the end of this week, though ongoing discussions might shift that date.
Barclays and Goldman Sachs are leading the deal and advising in the transaction, the story noted. None of the involved parties could be reached for comment.
Carlyle has been rumored to be the winning bidder since December (also a story broken by Reuters).
Johnson & Johnson first disclosed last year that it wanted to unload Ortho Clinical Diagnostics. Executives had wanted it to grow more robustly than it has. Overseas price controls and insurance payment pressures are among outside factors that have led to slower revenue gains. So, following the lead of other drugmakers that are streamlining and cutting costs, J&J is doing the same.
Ortho booked $2.16 billion in sales during 2012 selling a wide range of products including blood screening equipment and a variety of laboratory blood tests. That may seem like a lot. But Roche ($RHHBY), Danaher ($DHR), Abbott ($ABT) and Siemens ($SI) are among Ortho's much larger competitors.
- read the Reuters story