CLARIFICATION, 1/17/14 11:00 a.m. EST: This article’s sixth paragraph has been updated to clarify the professional status of three Cravath, Swaine & Moore attorneys who worked on this deal.
Private equity firm The Carlyle Group said Thursday it has agreed to purchase a blood-testing unit from health care giant Johnson & Johnson in a deal worth $4.15 billion.
News of a potential deal for the Raritan, N.J.-based unit, called Ortho-Clinical Diagnostics, surfaced earlier this week, with The Wall Street Journal reporting Wednesday that weeks of negotiations had resulted in a transaction being close at hand. Carlyle is financing the acquisition—which the buyer expects to close “in the middle of 2014,” pending regulatory approval—with a mixture of debt and cash from its sixth buyout fund, which is funded in the amount of roughly $13 billion.
Ortho-Clinical makes diagnostics tools used for both blood typing and screening donated blood for disease and contaminants. Carlyle has a history of large investments in the health care sector, including the buyout firm’s $3.9 billion acquisition of Pharmaceutical Product Development (PPD) in 2011. Carlyle paid $1.3 billion in 2010 to acquire Brazilian health services fund Grupo Qualicorp.
Advising Carlyle on its purchase of Ortho-Clinical is its longtime deal counsel Latham & Watkins, which represented the private equity firm in connection with its acquisitions of both PPD and Grupo Qualicorp. More recently, Latham handled Carlyle’s 2012 purchase of DuPont Performance Coatings in a $4.9 billion deal.
Leading the way for Latham on the deal with Johnson & Johnson are Washington, D.C., corporate partners Daniel Lennon and David Brown. Tax partner David Raab, employee benefits partners David Della Rocca, IP partner Steven Betensky, corporate counsel Joseph Simei and associate Travis Shrout are also advising Carlyle. Jeffrey Ferguson, a former associate at both Latham and Vinson & Elkins, is Carlyle’s general counsel.
Cravath, Swaine & Moore is serving as lead deal counsel to Johnson & Johnson on the Ortho-Clinical sale. Cravath’s team includes M&A partners Robert Townsend III and Damien Zoubek along with associates Stephanie Alexis, Jarrett Hoffman and Alexander Muller. Also working on the deal are Matthew Bobby, Ryan Farha and Mathieu Francon—Cravath associates who have not yet been admitted to the bar. Michael Ullmann is Johnson & Johnson’s general counsel.
Cravath has advised the health care company on a number of past M&A matters. A team led by Townsend and Zoubek, for instance, helped put together Johnson & Johnson’s $21.3 billion acquisition of orthopedic devices manufacturer Synthes in 2011.
Johnson & Johnson is also receiving legal adviceon the matter from attorneys at Baker & McKenzie and Freshfields Bruckhaus Deringers. Baker is serving as the company’s tax counsel with a team led by New York–based tax partner Jonathan Stevens. Freshfields, which is advising Johnson & Johnson on U.S. antitrust aspects of the deal, is fielding a Washington, D.C.-based team led by antitrust partner Paul Yde and antitrust counsel Mary Lehner.