Boston, MA 09/02/2014 (wallstreetpr) – Johnson & Johnson (NYSE:JNJ) plans to sell its medical devices business that makes items such as stents and catheters, stated Wall Street Journal in a recent article. The sale of the unit is expected to help JNJ further the slimming process of its wide-raging business portfolio. Sources said the sale of Cordis could fetch proceeds in the band of $1.5 – $2 billion.
Focus on bigger growth opportunities
Johnson & Johnson (NYSE:JNJ)’s Cordis unit is based in Bridgewater, N.J. and the business has a workforce of 5,000 people. JNJ talked about plans to sell it three years ago as the unit suffered a slump in sales and market share. That happened because JNJ sought to focus more on medical technologies that offer bigger growth opportunities. The business could attract other healthcare companies and private equity firms.
There have been a flood of healthcare deals in the recent times, and the divestment of Cordis would one among the growing list of healthcare assets that are being divested or purchased. Some of the notable healthcare deals in the recent times include that between Medtronic (MDT) and Covidien (COV) in which $43 billion is set to change hands in favor of Covidien. The other major industry deal is the April agreement between Zimmer Holdings (ZMH) Biomet Inc, in which the former offered more than $13 billion to acquire the latter.
Lower annual cost by $1 billion
Johnson & Johnson (NYSE:JNJ) is adjusting its portfolio, and it is keen on unloading less glamorous businesses that are also a cost burden to its operations. As such, the company seeks to lower its annual costs by as much as $1 billion. Besides Cordis that has now been earmarked for sale, the company earlier this year traded its blood-testing business known as Ortho-Clinical Diagnostics. It raised $4.15 billion from the transaction.
With almost $293 billion in market cap, Johnson & Johnson (NYSE:JNJ) is a business organization that makes a wide range of products from medical devices to prescription drugs. The company is based in New Brunswick, N.J.