Johnson & Johnson says offered US$2.1 billion for LifeScan diabetes unit

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REUTERS: Johnson Johnson has been offered about US$2.1 billion for its LifeScan Inc unit, which makes blood glucose monitoring products, by private investment firm Platinum Equity, the healthcare company said on Friday.

Sales in JJ’s diabetes care companies, which also include Animas Corp and Calibra Medical Inc, have been falling since 2012 in a highly competitive market and the company said in January last year it was evaluating options for the business.

JJ said in October it would shut down the North American operations of Animas unit after failing to find a buyer. Reuters reported in January that Chinese bidders were interested in JJ’s diabetes care companies in a deal that could fetch up to US$4 billion.

The offer for LifeScan, which generated revenue of about US$1.5 billion in 2017, was disappointing but fair since the unit had weighed on JJ’s growth for some time, Atlantic Equities analyst Steve Chesney said.

“Obviously expectations were for a higher valuation based on earlier reports, but probably closer to reality given the state of the business,” Chesney said.

JJ said the acceptance period for the offer would end on June 15, unless extended.

The company said the transaction was taken into consideration when it gave its earnings forecast in January.

A Reuters study of JJ’s financial results had found revenue at the diabetes care unit have been falling since 2012. In the first nine months of 2017, sales slid 7.7 percent year-on-year.

(Reporting by Arjun Panchadar and Munsif Vengattil in Bengaluru; Editing by Savio D’Souza)