J&J offered $2.7 billion for sterilisation business by Fortive

Johnson & Johnson (J&J) has received a $2.7 billion off for its Advanced Sterilisation Products (ASP) business from Fortive Corp and appears to be well disposed towards it.

Shlomi Nachman, company group chairman of J&J's Interventional Solutions and Specialty Surgery unit, 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.”

The news comes at a time when J&J has been reviewing its wide range of businesses with a view to refocusing and streamlining them. It bought Swiss pharma company Actelion last year, giving it a suite of lucrative products in pulmonary arterial hypertension, and this year has also been looking to divest its diabetes devices business, announcing in March that it had received an offer of over $2 billion for its blood glucose monitoring device manufacturing unit, LifeScan, from private equity firm Platinum Equity.

The market leader in its sector, J&J's ASP unit is focused on infection prevention solutions and had a net revenue of approximately $775 million in 2017.

It works with healthcare facilities to protect patients against hospital-acquired infections, supplying capital, consumables and software for use in low-temperature terminal sterilisation and high-level disinfection of reusable surgical instruments.

Within J&J's portfolio of companies the ASP unit is a division of Ethicon, which is in turn one of the healthcare giant's medical devices companies.

If the deal goes ahead, the transaction would be expected to close by early 2019 and would mark the biggest deal to date for the US-based Fortive, which was spun out of medical and industrial parts company Danaher Corp in 2016.

James Lico, president and chief executive officer of Fortive, said: “[The deal] 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 sterilisation and disinfection, with a large installed base and very strong brands."