Johnson & Johnson to Sell Diabetes Device Business for $2.1B
Johnson & Johnson has now reportedly received a binding offer of about $2.1 billion for its LifeScan business from private equity firm Platinum Equity.
Based in Los Angeles, Platinum Equity is a global investment company founded in 1995. LifeScan, which has headquarters in Chesterbrook, Pennsylvania, and Zug, Switzerland, sells personal blood glucose meters, testing strips, and testing systems. More than 20 million people in 90 countries use its products.
J&J’s diabetes care business include Animas Corporation and Calibra Medical Inc., as well as LifeScan. LifeScan generated $1.5 billion in revenue last year, what is generally considered a disappointing year.
J&J has a deadline for the offer of June 15, unless Platinum Equity chooses to extend it. If it’s accepted, it’s expected to close by the end of the year.
“We have great respect for Johnson & Johnson and appreciate their confidence in our ability to execute,” said Tom Gores, chairman and chief executive officer of Platinum Equity, in a statement. “This is an important investment for us in a business that serves millions of patients around the world. We are committed to putting our financial resources and global operating expertise to work in support of the company’s core mission to improve the quality of life for people living with diabetes.”
“LifeScan’s OneTouch blood glucose monitoring products play an important role in the lives of millions of patients living with diabetes, and following a thorough review of all strategic options, we feel confident that the business would have a promising future with Platinum Equity,” said Ashley McEvoy, Company Group Chairman, Consumer Medical Devices, Johnson & Johnson. “This initiative is part of our ongoing, disciplined approach to portfolio management to focus on our most promising opportunities to help patients and drive growth.”
“LifeScan has been a leader in diabetes care for more than 30 years and has consistently developed and brought to market industry leading products,” said Jacob Kotzubei, Platinum Equity Partner, in a statement. “We have worked closely with Johnson & Johnson to craft a divestiture solution for LifeScan that would create a global standalone business and set the stage for continued investment in growth and innovation. Once our offer is accepted we will work with the management team to ensure a seamless transition on behalf of patients, healthcare providers and the company’s employees around the world.”