Carlyle Group Rumored To Be in Negotiations to Buy Medtronic’s Patient Monitoring and Respiratory Business Units

Private equity firm Carlyle Group Inc. is rumored to be in negotiations to acquire a controlling stake in two medical device businesses owned by Medtronic Plc, according to insiders familiar with the matter. The potential deal, valued at over $7 billion, is the culmination of Medtronic’s year-long review of its patient monitoring and respiratory intervention units. The transaction underscores Medtronic’s strategic shift to focus on higher-growth assets, including cardiovascular and diabetes devices. In the 2022 fiscal year, these two units generated approximately $2 billion in revenue for the company and consequently the rumored valuation would represent a sales multiple of 3.2x trailing sales. In the most recent quarter these business units were growing 3% year-over-year making them dilutive to Medtronic’s overall growth rate.

Under the proposed agreement, the businesses slated for divestment would be consolidated into a new company majority-owned by Carlyle Group. However, Medtronic would maintain a stake of more than 35% in the new entity. There’s no guarantee that a deal will materialize, and both Medtronic and Carlyle Group have not provided any official commentary.

The Carlyle Group, is a prominent private equity firm managing assets worth $385 billion, has demonstrated a strong presence in the healthcare sector. In the past, it orchestrated significant deals such as the acquisition of medical screening business Ortho Clinical Diagnostics from Johnson & Johnson for $4 billion, later selling it to COVID-19 test maker Quidel Corp in a $6 billion cash-and-stock transaction.