As Carlyle is unlikely to the remotest understanding of O-CD's business and therefore cannot make a worthwhile Due Diligence, its only recourse to improve ROI is 'cost-cutting'. I.e. sack a bunch of those who are actually making stuff.
The return of Cathie the Terminator as Head Honcho should set the seal on the business.
Danaher is an appropriate model. As is Bain.
These people are buggering-up perfectly good medical companies.
O-CD would be marginally better off with GEHC. And that is saying something.
Makes a lot of sense, any investor with a modicum of industry knowledge (clearly not these folks) knows that this is not a business you pay a premium to own. Cost cutting is not going to turn them around and in the current reimbursement climate who would invest money in R&D ?
The Carlyle Group?
hmmmm....per their web site they have investments in:
- Dunkin Donuts
- Have purchased hospitals in Turkey
- refurbishing the state of Connecticut rest stops. Oh forgot, there are 23 of them.
for more see http://www.carlyle.com/our-business/industry-expertise
Looks liker a great fit for Ortho.
Exclusive: Carlyle in the lead to acquire J&J diagnostics unit
Reuters, Monday, December 23, 2013
Private equity firm Carlyle Group LP is in the lead to acquire Johnson & Johnson's Ortho clinical diagnostics unit, three people familiar with the matter said on Monday, in a deal expected to be around $4 billion.
Johnson & Johnson currently sees Carlyle's offer as superior to a rival bid from Blackstone Group LP in partnership with healthcare and industrial conglomerate Danaher Corp, the people said, cautioning that negotiations were ongoing and the outcome could still change.
The exact price of Carlyle's offer could not be learned. The people asked not to be identified because details of the sale process are confidential. Carlyle, Johnson & Johnson and Blackstone declined to comment while a Danaher representative did not immediately respond to a request for comment.
One does not need to buy OCD to obtain rights to certain infectious disease tests. J&J has licensed these tests to others in the past and there is no obvious reason they wouldn't continue to do so. What could be a better source of revenue than a good royalty agreement and J&J has been pretty hard nosed in their licensing in the past.
this all sounds like J&J is playing one suitor against another all in a bid to wring as high a price as possible. A logical play by J&J. J&J (remember their Credo?) has spent billions settling lawsuits as a sale of OCD would certainly help offset some of those losses.
Sadly there is not much left of OCD. Any potential buyer who has done due diligence will see there is not much meat left on the bone. Thus who will over spend for the carcass that J&J created.
The Siemens comparison is an interesting one. Note that Beckman does not have any true infectious disease assays, something OCD does have though recently it seems their hepatitis A and B assays have shown to be somewhat troublesome. Looking at their pack inserts on line shows the manufacturing is performed over seas.
Fascinating that Danaher is making a bid. It is not clear from other threads here that Danaher has good control of the BCI purchase or that BCI is healthy and growing. Danaher would do themselves a big favor by looking at what happened to Siemens diagnostics after Siemens purchased three companies with quite a bit of overlap and too much geographical diversity. The last word that anyone would associate with the Siemens situation is 'synergy'. Danaher would be well advised to make sure they have their current house in order and a realistic plan for integrating two companies at opposites sides of the continental US. The also need to make sure that a war doesn't break out between the East and West coasts the way the three-way war of Dade, Bayer, and DPC broke out, and still pretty much exists, within Siemens DX.
Sources familiar with the Johnson & Johnson (NYSE:JNJ) business say the company has several bids of $4 billion for its Ortho Clinical Diagnostics division. The news, reported by Financial Juice, follows a report in November that said multiple suitors were bidding on the J&J division that the company doesn’t consider essential to its core business.
The Financial Juice report indicates Johnson & Johnson was requesting the final bids from Danaher (NYSE:DHR), Carlyle Group (NYSE:CG) and CVC Capital Partners in an attempt to push the sale price above $4 billion. In November, Bloomberg reported there were at least five groups on the list of potential buyers for Ortho Clinical Diagnostics, a unit the company didn’t plan to expand or work toward improving.
The diagnostic testing equipment Johnson & Johnson sells through its Ortho unit will take a back seat to the company’s molecular diagnostics and household products. Meanwhile, the health care corporation has been battling the bad press from faulty hip replacement devices and the $2.5 billion settlement it offered to end the court proceedings. Several thousand Indian citizens who had received the devices were recently put on alert by the Indian government.
Turning coal into diamonds involves a lot of heat and tremendous pressure. As a Danaher associate, I can tell you that they are indeed very good at squeezing; as in squeezing every dime of profit, so far mostly from the pockets of employees. I wish Danaher could whittle away at my weight issue as well as they whittle away at my wallet.
"Hello People we are talking about Danaher.... they know how to make business... they can turn coal to diamonds. If they take J&J they will take the most out of it.."
oh my goodness - if I look to BEC, from an external point of view I would say they have no clue - sorry
Hello People we are talking about Danaher.... they know how to make business... they can turn coal to diamonds. If they take J&J they will take the most out of it..
Conversation seems to have moved to another post.
NEW YORK, Nov 21 (Reuters) - Carlyle Group LP and a consortium of Danaher Corp and Blackstone Group LP have advanced to the final stage of negotiations for Johnson & Johnson's diagnostics unit, according to people familiar with the matter.
These two bidders appear willing to pay the most for the unit, Ortho Clinical Diagnostics, though a deal may now value it at up to $4 billion, less than the $5 billion J&J was initially hoping for, the people said on Thursday.
Other private equity firms, including Bain Capital LLC, BC Partners Ltd and a consortium of CVC Capital Partners Ltd and Leonard Green & Partners LP, considered the valuation too high given the unit's lack of growth and are no longer in talks with J&J, the people added.
The people spoke on condition of anonymity because the sale process is confidential. J&J and Danaher did not respond to requests for comment. Carlyle, Blackstone, Bain, BC Partners, CVC and Leonard Green declined to comment.
The diagnostics unit makes blood screening equipment and laboratory blood tests that are considered older and less profitable than modern molecular diagnostics. It also makes tests that can reveal a patient's blood type and screen for viruses such as HIV and hepatitis C.
It is a small player in a market led by larger rivals such as Roche Holding AG, Siemens AG, Abbott Laboratories and Danaher.
J&J said in January it would explore strategic alternatives for the unit and cautioned that the process could take anywhere from 12 months to 24 months.
It asked JPMorgan Chase & Co to run the sale of the unit, Reuters previously reported.
J&J's decision to divest the division comes as drugmakers are shedding businesses and cutting costs in response to overseas price controls and pressure on payments from insurers and the government.
Pfizer Inc, for instance, recently spun off its animal health products business, and Abbott split off its branded drugs unit early this year.
Rumor is that Cathy B had been accompanying potential suitors. Other former OCD senior managers have also been seen on campus as part of groups touring.
OCD also had their sales meeting in September. Very odd. One possible explanation is that a sale was pending yet feel through.
Hopefully if this is true, they will recognize how decimated the support groups, R&D staff, and some of the manufacturing areas are. There is little if any assay development, some available assays have been pulled, and customer base continues to erode.
This will help settle in a fair price.
Note that J&J has settled 2 large lawsuits with costs greater that 4 billion (US).
Ortho has rights to tests that BCI doesn't have. Buying Ortho would add critical tests to immuno menu. Devel work would most likely move from Ortho to Chaska.
That equation says that salaries and real estate in southern cali are expensive
Another thread suggests a rumor that Danaher will buy all of Siemens healthcare, not just diagnostics. Just something else to add into the equation.
Any thoughts on the impact on beckman brea if this goes through?
"while other diagnostic companies are expanding into new break through assays such as high sensitive troponin, nothing from OCD".
The result of dumping UK immuno R&D 13 years ago.
Pollards Wood had a very highly-regarded group of I-D researchers but Cathie the Terminator needed to make the numbers for the profits bottom-line. So off we went.
The ECi platform of individual wells (Kodak's mad idea)does not lend itself to custom-prep assays which can be taken up by the manufacturer. In complete contrast to its precursor platform, Amerlite.
Chickens coming home to roost....
I do not see a good outcome for O-CD or my ex-colleagues if Danaher takes it.
Could be worse....,Thermo. Except that Borg probably has too much sense.
As does GEHC, demonstrated when it walked away from the pig with lipstick, aka Abbott Diag., a few years ago.
Eat my anus danahair
They are bottom feeders and OCD is definitely at the bottom.
does either equity group know what they are really getting?
- there are no clinical chemists or MD's left on staff
- several current assay issues
- the Vitrous 5600 is so slow on the drug of abuse side you need to off load to other platforms
- most of their knowledgeable technical support staff are gone (a phD named Joe I was really good, is he still there?)
- the R&D area has been decimated:
- no relevant publications from OCD while other vendors publish
- a tiny presence at AACC
- while other diagnostic companies are expanding into other areas such as molecular diagnostics, nothing from OCD
- while other diagnostic companies are expanding into new break through assays such as high sensitive troponin, nothing from OCD
thus the amount of rebuilding dollars ma exceed the cost of purchase.
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