Exclusive: Carlyle in exclusive talks for $7 billion-plus Medtronic units deal

Exclusive: Carlyle in exclusive talks for $7 billion-plus Medtronic units deal

Private equity firm Carlyle Group Inc (CG.O) is in exclusive negotiations to acquire a majority stake in two medical device businesses of Medtronic Plc (MDT.N) for over $7 billion, according to sources familiar with the matter. This potential deal would conclude Medtronic’s year-long review of its patient monitoring and respiratory interventions businesses, which it had considered spinning off into a separate public company.

Medtronic aims to streamline its portfolio and focus on its higher-growth assets, such as heart and diabetes devices, by divesting the two units that generated around $2.2 billion in revenue in the 2022 fiscal year. The businesses being divested would be transferred to a new company majority-owned by Carlyle, while Medtronic would retain a stake of over 35% in the new company.

It should be noted that the sources caution that the deal is not certain, and they requested anonymity due to the confidential nature of the matter. Both Medtronic and Carlyle declined to comment on the negotiations.

Medtronic, a New York-listed company with a market value of $105 billion, specializes in medical devices that treat over 70 health conditions across various divisions. The company recently raised its annual profit forecast as the demand for medical devices increased with the return of non-urgent surgeries to pre-COVID-19 levels.

In a similar move, Medtronic’s competitor Baxter International Inc (BAX.N) also focused on growth by divesting certain assets. Baxter announced plans to spin off its renal care and acute therapies units and sold its biopharma solutions business to a private equity consortium for $4.25 billion, including debt.

Carlyle, with $385 billion in assets under management, is a prominent investor in the healthcare sector. The firm has previously made deals in the industry, including the sale of primary care clinic operator One Medical to Amazon.com Inc for $3.9 billion and the acquisition of Ortho Clinical Diagnostics from Johnson & Johnson for $4 billion.

In conclusion, Carlyle Group’s exclusive negotiations to acquire a majority stake in Medtronic’s medical device businesses reflect Medtronic’s strategic focus on its higher-growth assets and the ongoing trend of divestments in the healthcare sector.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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