Exclusive: Carlyle, Hellman among firms vying for One Call - sources

By Greg Roumeliotis and Soyoung Kim

NEW YORK | Fri Sep 6, 2013 12:27pm EDT

NEW YORK (Reuters) - Carlyle Group LP and Hellman & Friedman LLC are among the private equity firms competing for One Call Care Management Inc, a medical cost containment services company that is on the block for more than $1.5 billion, according to four people familiar with the matter.

Apax Partners LLP, Advent International Corp, General Atlantic LLC and Berkshire Partners LLC are also in the running for One Call, with meetings with the company's management starting this month, the people said this week.

One Call's private equity owner, Odyssey Investment Partners LLC, has asked Jefferies Group LLC to handle the sale process, people familiar with the matter told Reuters in July. {ID:nL6N0FF01B]

The people asked not to be identified because the sale process is private. Representatives of One Call, Odyssey, Advent, Hellman & Friedman, Apax and Berkshire did not have any immediate comment. Carlyle and General Atlantic declined to comment.

One Call provides workers' healthcare compensation payors, such as insurance companies, with discounted access to diagnostic radiology and neurodiagnostics providers.

The Parsippany, New Jersey-based company makes its money on the spread between the prices charged to these payors and the discounted prices contracted with providers and vendors in its network.

Odyssey, a New York-based buyout firm with about $3 billion in assets under management, acquired One Call Medical Inc in 2009 and merged it with industry peer MSC Care Management Inc in 2012.

One Call's $529 million acquisition of MSC was made possible partly through a $210 million senior unsecured term loan held by GSO Capital Partners, the credit investment arm of Blackstone Group LP, which also invested in One Call Care Management's equity, according to credit research notes issued at the time.

Besides the MSC merger, One Call made several other acquisitions to expand its networks under Odyssey's ownership. In July, the company said it would acquire smaller peer TechHealth Inc.

(Editing by Matthew Lewis)

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J&J kicks off $5 billion clinical diagnostics unit sale: sources

By Soyoung Kim and Greg Roumeliotis and Jessica Toonkel

NEW YORK | Fri Sep 6, 2013 6:20pm EDT

NEW YORK (Reuters) - Johnson & Johnson has launched a sale process for its Ortho Clinical Diagnostics unit, which makes blood screening equipment and laboratory blood tests and could fetch around $5 billion, three people familiar with the matter said on Friday.

J&J has asked JPMorgan Chase & Co to run the sale and is preparing to send detailed financial information in coming weeks to potential buyers, including some of the world's largest private equity firms and a number of healthcare companies, the people said.

Early estimates suggest the unit's earnings before interest, tax, depreciation and amortization are between $400 million and $500 million, suggesting a possible valuation of roughly $5 billion, the people said.

The unit, whose tests are considered older and less profitable than modern molecular diagnostics that examine gene mutations for signs of disease, has annual sales of about $2 billion.

The people asked not to be identified discussing details of the process. J&J declined to comment, while a JPMorgan spokeswoman had no immediate comment.

Healthcare conglomerate J&J said in January it would explore strategic alternatives for the unit and cautioned that the process could take anywhere from about 12 to 24 months.

Industrial and healthcare conglomerates General Electric and Danaher Corp. are likely to take a serious look at bidding for the J&J business, said one of the sources and another who had heard about the sales process.

GE declined to comment. A call to Danaher was not immediately returned.

J&J's decision to divest the division comes as drugmakers are shedding businesses and cutting costs due to overseas price controls and pressure on payments from insurers and the government. Pfizer Inc, for instance, just spun off its animal health products business, and Abbott Laboratories split off its branded drugs unit early this year.

Ortho Clinical Diagnostics, whose revenue growth has been relatively flat, is No. 5 in the clinical diagnostics market, as measured in sales. Typically, J&J's businesses rank first or second in their respective markets.

Clinical diagnostics are less attractive than molecular diagnostics, which could see strong revenue growth in coming years as examination of genes helps doctors steer patients to appropriate treatments.

But some analysts, including Les Funtleyder of Poliwogg, have said private equity buyers might be interested in the stable cash flow the J&J unit could provide.

(Reporting by Soyoung Kim, Greg Roumeliotis, Jessica Toonkel and Ransdell Pierson in New York; Editing by Gerald E. McCormick, Bernard Orr)

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