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 The deal is Carlyle's biggest healthcare investment since it bought
nursing, hospice and home health services provider Manor Care Inc in
2007.
"Now with this divestiture nearly complete, we're inclined to
believe (J&J) will continue to strategically prune its business
segments and use the proceeds to return cash to shareholders or
invest in higher-growth assets," Leerink analyst Danielle Antalffy
wrote in a note.
J&J's diabetes business, which includes LifeScan blood glucose
meters and Animas pumps, could be the next business to go, given
slowing sales growth and weak margins, Antalffy said.
J&J shares were up marginally at $95.01 in early trading on the New
York Stock Exchange on Thursday. Carlyle shares were up slightly at
$36.97.
Reuters reported in December that Carlyle was nearing a deal to buy
the business, trumping a joint bid from Blackstone Group <BX.N> and
Danaher Corp <DHR.N>.
J&J said in January 2013 that it was considering a sale or spinoff
of the unit, whose products include equipment for laboratory
diagnostics and blood transfusion screening.
J&J's businesses typically rank first or second in their markets.
The diagnostics unit was ranked fifth among competitors based on
sales, according to Thomson Reuters data.
"This transaction is a result of our disciplined approach to
portfolio management in order to achieve the greatest value for
Johnson & Johnson," Chief Executive Alex Gorsky said in a statement.
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Drugmakers around the world are getting rid of non-core businesses
as a way to cut costs in the face of pricing and reimbursement
pressures from cash-strapped governments.
Carlyle, which was advised by Barclays and Goldman Sachs, said it
had secured committed debt financing from Barclays, Goldman Sachs,
Credit Suisse, UBS and Nomura. Latham & Watkins LLP acted as legal
advisers to the firm.
J&J's advisers included J.P. Morgan, the company said.
The companies said the deal was expected to close in mid 2014.
(Reporting by Caroline Humer in New York
and Esha Dey and Vrinda Manocha in Bangalore; editing by Bernadette
Baum and Ted Kerr)
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