Barron's reported:
Healthcare diagnostics manufacturer Quidel reached an agreement to acquire Ortho Clinical Diagnostics Holdings for $24.68 a share of common stock in cash and newly issued shares in the combined company.
Carlyle purchased Ortho Clinical Diagnostics in 2014. It took the company public in 2021. SEC filings indicate Carlyle held over 143 million shares in ODCX and a majority of board seats. It also showed how private equity underwriters fee affiliates.
Management fees of $11.4 million over the last four years.
Management fees of $7.5 million for years 2022-2025
PEUs also churn affiliates. Here's how Carlyle used Ortho to send business to its owned companies.:
Transactions with portfolio companies of funds affiliated with Carlyle
We have entered into agreements to sell products and provide services to Global Health Private Limited, Rede D’Or São Luiz S.A. and Pharmaceutical Product Development, Inc., health care diagnostic companies that are portfolio companies of funds affiliated with Carlyle. During the fiscal year ended January 3, 2021, we recognized revenues of approximately $1.1 million from Global Health Private Limited and approximately $2.7 million from Rede D’Or São Luiz S.A. For the fiscal year ended January 3, 2021, revenues recognized from Pharmaceutical Product Development, Inc were immaterial.
ProKarma Holdings Inc., Reval Holdings Inc. and Work & Co., portfolio companies of funds affiliated with Carlyle, have provided IT services to us. During the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.4 million to ProKarma Holdings Inc. For the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.4 million to Work & Co. For the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.3 million to Reval Holdings Inc.
CFGI, a portfolio company of a fund that became affiliated with Carlyle in the fourth quarter of fiscal year 2017, provides consulting services to us. During the fiscal year ended January 3, 2021, we incurred consulting fees to CFGI of approximately $1.1 million.
WellDyneRx, LLC, a pharmacy benefit management organization affiliated with Carlyle, started to provide pharmacy services to us during the fiscal year ended January 3, 2021. During the fiscal year ended January 3, 2021, we incurred fees related to pharmacy services of approximately $5.7 million.
The Carlyle Group continues monetizing affiliates that benefited from the coronavirus. It's latest sale involves COVID-19 testing. Quidel was the "first to market a rapid SARS-CoV-2 antigen test in the U.S." Orho Clinical marketed "the first U.S. Food and Drug Administration-authorized high-volume antibody and antigen tests for COVID-19."
Quidel will acquire Ortho for $24.68 per share of common stock, for a total consideration of approximately $6.0 billion.
Sell at the top. Buy when assets are distressed. That's the PEU way. Fed Chair Jay Powell, former Carlyle Group managing director, is in a unique position to give his former employer the next round of buying. Until then, let the PEU profits flow!
Note: One of Carlyle's Cayman Islands subs is doing the deal with Quidel, who's stock is tanking (down nearly $30 a share or almost 18%)
Update 12-28-21: Ortho Clinical board member Thomas Mac Mahon gifted nearly 80,000 shares to three family trusts one week before the deal was announced. Prior to the gift he held over 141,000 shares of OCDX. As an Executive Partner for Flare Capital Mahon is well aware of tax avoidance tactics. Not sure how he gets to do this while a public company is in negotiations for a sale.
Update 1-22-22: Both Quidel and OCDX are down significantly post deal announcement. The terms of the deal no longer total $24 per share. It's now down to just over $18.
Update 7-21-24: Carlyle continues to monetize OrthoQuidel. Over five trading days various Carlyle affiliates (many with Cayman names) sold shares worth over $10 million. Ka-ching!
