Carlyle’s Ortho Falls in Debut After Missing IPO Target

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Ortho Clinical Diagnostics Holdings Plc sunk 5.3% in its trading debut after its $1.3 billion initial public offering fell short of goals for the listing.

Shares of Ortho, backed by private equity firm Carlyle Group Inc., opened Thursday below the $17 IPO price and never rose above it. They closed at $16.10, giving the company a market value of $3.58 billion. Ortho sold 76 million shares Wednesday after marketing 70 million shares for $20 and $23.

Based in Raritan, New Jersey, Ortho provides donor screening and blood-typing diagnostic products to clinical laboratories and hospital groups, according to its website. Its products include tests for Covid-19 antibodies.

“There’s probably never a better time to be a diagnostics company,” Chief Executive Officer Chris Smith said in an interview. Ortho has benefited from being part of the solution to the coronavirus pandemic, he said.

Carlyle backed several companies that went public last year. They included health-related firms such as 1Life Healthcare Inc., which does business as One Medical, and drug research firm PPD Inc., as well as business intelligence platform ZoomInfo Technologies Inc.

“It has been an unprecedented time for health-care IPOs, with Carlyle successfully supporting four health-care companies through the IPO process in the last year alone,” said Stephen H. Wise, Carlyle’s global head of health care.

Carlyle acquired Ortho from Johnson & Johnson for $4 billion in 2014. After the IPO, Carlyle will control 66% of the company’s stock, according to its filings.

Ortho had net income of $48 million on revenue of $1.25 billion for the nine months ended Sept. 27, according to its filings. The company said it plans to use the proceeds to redeem notes, working capital and general corporate purposes.

The offering was led by JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. The shares are trading on the Nasdaq Global Select Market under the symbol OCDX.

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