Matthew Daneman

Staff writer

The likely new owner of Ortho-Clinical Diagnostics says one of its big strategies is more investment in the Rochester-based research and development operations.

Private equity giant Carlyle Group said Thursday it had reached a tentative $4.15 billion deal with Johnson & Johnson to purchase OCD. According to Carlyle, it could close on the acquisition as soon as mid-2014.

Ortho-Clinical — based in Raritan, N.J. — employs close to 1,100 in the Rochester area in manufacturing and R&D. It specializes in diagnostic and medical screening tests and equipment.

Carlyle declined to respond to a reporter's questions. But the company indicated that part of its strategy for OCD is to invest more heavily in the Rochester-based R&D operation to help products in the pipeline, as well as to speed up the development and launch of new tests to be used on those technology platforms.

In a statement, Carlyle Managing Director Stephen H. Wise said, "Ortho-Clinical Diagnostics is an established global brand with a reputation for quality and innovation. Through accelerated investment in research and product development and continued expansion into both emerging and established markets, we expect to tap into rising demand for sophisticated medical diagnostic products and services worldwide.

"We have been focused on the diagnostics industry for many years given its attractive growth prospects, driven by the crucial role it plays in health care decision-making and influencing patient outcomes. We believe that OCD, with its world-class employee base and talented management team, is poised for the next level of success."

The Carlyle announcement ends close to a year of uncertainty for OCD — a year that started when Johnson & Johnson said in January 2013 it was looking into a possible sale or spinoff of its Ortho-Clinical business. OCD was formed out of the medical diagnostics business Kodak sold to J&J in 1994.

J&J said that under the terms of the purchase offer, it has until March 31 to accept it.

Carlyle Group shares closed Thursday at $36.92, down 0.2 percent. Johnson & Johnson shares also were down 0.2 percent to $94.64.

J&J's diagnostics business division has been dealing with sales struggles. In 2012, while J&J's medical devices and diagnostics business segment sales were up nearly 9 percent, much of that was driven by booming growth in orthopedics and specialty surgery; its diagnostic business revenues — at $2.1 billion — were down 3 percent. And for the first nine months of 2013, diagnostics revenues were down another 2.1 percent.

In a statement Thursday, J&J CEO Alex Gorsky said the OCD sale "is a result of our disciplined approach to portfolio management in order to achieve the greatest value for Johnson & Johnson."

U.S. Sen. Charles Schumer, D-N.Y., said Wednesday that he had a phone conversation with Carlyle this week in which he received assurances the company plans to keep its manufacturing workforce stable and to invest heavily in R&D operations — manufacturing and R&D comprising the work OCD does in its Greece and Rochester locations.

MDANEMAN@DemocratandChronicle.com

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