Johnson & Johnson has begun actively preparing DePuy Synthes for a potential sale, according to people familiar with the plans. The company is compiling offering materials and financial data for the orthopedics unit before holding discussions with prospective buyers over the next few weeks.
DePuy Synthes, J&J's business that manufactures devices used in hip and knee replacement procedures, reported $9.3 billion in sales in the last year. Sources indicate the unit could be valued at more than $20 billion if taken to market.
Interest appears to be emerging from multiple quarters. Several large private equity firms are said to be weighing the formation of acquisition teams to bid on the business. In addition, the unit may attract suitors from within the medical device industry itself, as competing companies evaluate whether to pursue an acquisition.
Johnson & Johnson had earlier signaled intentions to separate the orthopedics unit from its broader operations. Instead of a separation, the company is now exploring the option of an outright sale, a shift that is reflected in the preparation of detailed financial documentation ahead of buyer meetings.
The company is expected to meet with potential buyers in the coming weeks, after which any formal process - such as launch of a sale or solicitation of bids - would depend on interest and further internal decisions. At this stage, the information available is limited to the preparations and the reported areas of buyer interest.
Market participants will likely watch for how private equity groups and strategic medical device companies respond. The combination of DePuy Synthes' recent revenue run rate and reported potential valuation places it among sizable healthcare asset transactions, although the ultimate structure and timing of any deal remain to be determined.
Market implications
- Healthcare and medical device sectors could see transactional activity if a sale is launched.
- Private equity firms focused on healthcare assets are among the most directly impacted buyers.
- Any significant divestiture may influence competitive dynamics in orthopedics equipment and implant markets.