Johnson & Johnson's ($JNJ) move to sell its Ortho Clinical Diagnostics unit has attracted a number of first-round bids from several big-name private equity firms. Reuters reports that Blackstone Group, KKR, Bain Capital, Carlyle Group and BC Partners all threw their hats into the ring, among others.
Sources told the news agency that the bidders are now waiting to hear who made the final round, a disclosure expected some time this week. The final price could hit close to $5 billion, according to the story.
News that J&J had plans to seek suitors for the division broke a few weeks ago after months of speculation fueled by the company's January announcement that it would pursue "strategic alternatives" for the unit. Ortho Clinical Diagnostics makes blood screening equipment and laboratory blood tests that scan for everything from heart attack damage to hepatitis C and HIV. The division also booked $2.16 billion in sales in 2012 ($3.3% of J&J's total revenue).
So why sell the division?
It appears to not be growing fast enough. Reuters notes that molecular diagnostics tests are considered to be more profitable, though in vitro diagnostics is also a solid, steady growth engine. Even so, CEO Alex Gorsky must drive growth in the company's medical device and diagnostics division outside of the Ortho unit. J&J's $21 billion acquisition of devicemaker Synthes last year has helped, but outside of the Synthes buy, device and diagnostics sales haven't hit financial targets.
Roche ($RHHBY), Abbott ($ABT) and Danaher have also been held up as potential buyers. JPMorgan Chase has been asked to run the sale, multiple media outlets have reported.
- read the Reuters story