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Carlyle Group to buy Ortho-Clinical Diagnostics, Schumer says

Rochester Business Journal
January 15, 2014

A sale of Johnson & Johnson’s Greece-based Ortho-Clinical Diagnostics unit could close as early as tomorrow, Sen. Charles Schumer said Wednesday.

Schumer identified the buyer as the Carlyle Group.

Carlyle Group spokesman Randy Whitestone in New York declined to comment.  

The Senator learned of the deal through recent conversations with Carlyle Group officials with whom he has been in touch as talks between J&J and Washington, D.C.-based asset management and private equity firm progressed, a spokeswoman in Schumer’s Washington office said.

Originally an Eastman Kodak Co. medical diagnostic unit producing Kodak branded blood analyzers, Ortho-Clinical Diagnostics employs some 1,000 locally in manufacturing and research and development operations.

J&J has had Ortho-Clinical Diagnostics on the block since J&J CEO Alex Gorsky announced in a fourth-quarter 2012 earnings call that the New Jersey based J&J was mulling a sale of the unit. In statements at the time, Gorsky said J&J wanted to shed Ortho-Clinical because although it was a successful company, it did not have the top share in several markets it competes in.

"When we looked at (Ortho-Clinical Diagnostics), what we see is a business with many very good technologies," Gorsky told analysts in the earnings call. "We also saw a business that did not have a No. 1or No. 2 position within their respective marketplaces.”

The Carlyle Group intends to grow Ortho-Clinical Diagnostics’ research and development and maintain its manufacturing operations, Schumer said.

The Carlyle Group’s investment “is exactly what the doctor ordered for this home-grown Rochester business,” Schumer said.

“Should this deal be finalized as expected, it will mean that the Ortho-Clinical Diagnostics unit will remain in Rochester, and that on the longer-term, the city will continue to be a hub of high-tech job growth and innovation.”

The Carlyle Group is particularly impressed with Ortho-Clinical Diagnostics’ film-based optics work. It also sees  the Rochester-area’s high-grade workforce as a plus, Schumer added. 

Founded in Washington, D.C. in 1987, the Carlyle Group has $185 billion in assets under management globally. Its operations include U.S., Asian and European private-equity partnerships.

Carlyle Group’s past leveraged buyouts include the Hertz Corp. car rental firm, which it acquired as the lead buyer from Ford Motor Co. along with Merrill Lynch and Clayton, Dubilier & Rice in 2005 in a $5.8 billion deal.

Carlyle and the partners exited Hertz a year later, reaping handsome profits in a Hertz initial public offering.

(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 



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