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Diagnostics Firm Ortho Clinical Files for IPO

NEW YORK ─ Pure-play in vitro diagnostics firm Ortho Clinical Diagnostics on Monday filed with the US Securities and Exchange Commission to go public on the Nasdaq.

Ortho did not price the offering but said in its Form S-1 that it intends to use the net proceeds from the offering to redeem $160.0 million in aggregate principal amount of 2025 notes; $270.0 million in aggregate principal amount of 2028 notes; and repay an undisclosed aggregate principal amount of borrowings under a dollar term loan facility.

As of September 27, 2020, $400.0 million in aggregate principal amount of the 2025 notes, $675.0 million in aggregate principal amount of the 2028 notes and $2.2 billion in aggregate principal amount under the dollar term loan facility was outstanding, the firm said.

JP Morgan, Bank of America, Goldman Sachs, Barclays, Morgan Stanley, Citibank, Credit Suisse, UBS Investment Bank, Evercore ISI, and Piper Sandler are the joint bookrunners on the deal.

In 2014, Raritan, New Jersey-based Ortho was acquired by private equity firm the Carlyle Group from Johnson & Johnson and became an independent organization, solely focused on delivering IVD products and servicing a diagnostic customer base.

The firm booked $1.25 billion in sales for the nine months ended Sept. 27, 2020 and posted a net loss of $171 million, or $1.17 per share. It had $68.6 million in cash and cash equivalents, it said. 

In 2019, Ortho had $1.80 billion in revenues and a net loss of $156.9 million, or $1.08 per share. 

In its SEC document, Ortho said that its business impacts approximately 800,000 patients each day. It provides diagnostic testing solutions to clinical laboratory and transfusion medicine communities, and its global infrastructure and commercial reach allow it to serve those markets with significant scale.

The firm noted that its business model generates "significant recurring revenues and strong cash flow streams from ongoing sales of high margin consumables."

In 2019, consumables contributed more than 90 percent of its total revenue and approximately 93 percent of its core revenue. The firm has more than 4,500 employees, including approximately 2,200 commercial sales, service, and marketing personnel, and it has a presence in more than 130 countries and territories.

The company plans to list on the Nasdaq under the symbol OCDX.