Fortive offers $2.8B for J&J’s advanced sterilization biz

Johnson & Johnson (NYSE:JNJ) said yesterday that industrial conglomerate Fortive (NTSE:FTV) made a binding offer to acquire the advanced sterilization business from J&J’s Ethicon division for approximately $2.8 billion.

The deal includes $2.7 billion in cash and an additional $100 million in retained net receivables, New Brunswick, N.J.-based Johnson & Johnson said.

J&J’s advanced sterilization products biz reported a net revenue last year of approximately $775 million, the company reports. The offer has an acceptance period of 120 days, and if accepted, is expected to close no later than early 2019, J&J added.

Assets included in the deal for the ASP biz include capital, consumables and software designed for use in low-temperature terminal sterilization and high-level disinfection of reusable surgical instruments, J&J said.

“As we balance the interests of all our stakeholders to deliver the greatest value to customers, healthcare providers and shareholders, we must continuously assess strategic fit and explore alternatives for our businesses. ASP has a long history of pioneering infection prevention technology, and we are confident that Fortive would be well-positioned to continue to drive the business toward achieving its full potential,” J&J interventional solutions and specialty surgery group chair Shlomi Nachman said in a press release.

Fortive said that it is beginning consultation processes with employees’ representative bodies in applicable jursidictions, including France, Germany, Italy, Switzerland and the European Works Council. Fortive added that it expects to enter into a definitive purchase and sale agreement for the acquisition, which has already been approved by its board of directors.

“We are excited about today’s announcement which demonstrates the continued evolution of our portfolio towards improving growth, increasing recurring revenue, and expanding positions in attractive markets. With ASP, we expect to acquire a global leader in medical sterilization and disinfection, with a large installed base and very strong brands. This acquisition is entirely consistent with our focus to help customers drive better safety, compliance and efficiency in critical workflows. We have conviction that the addition of ASP to our portfolio will create compelling value for both ASP and Fortive employees, our customers, and shareholders. We are impressed by the strength of ASP’s innovative product portfolio and its customer relationships. ASP’s culture and commitment to quality and service lends itself to application of the Fortive Business System to drive both accelerated growth and operating synergies. We look forward to welcoming the ASP team to the Fortive family,” prez & CEO James Lico said in a prepared statement.

Last month, J&J subsidiary DePuy Synthes said it inked a deal to acquire the assets of Medical Enterprises Distribution, including its automated ME1000 surgical impactor designed for hip replacements, for an undisclosed amount.

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