One of the last vestiges of a 1980s buying spree has been sold.
In that decade, a number of large pharmaceutical companies bought medical device firms in an effort to diversify. One of the only drug companies to stick with the strategy, however, was Johnson & Johnson. Most of the drug giants sold their device units within a decade, as they narrowed focus to blockbuster drugs.
Another drug company that had stuck it out was Bristol-Myers Squibb, which held on to its ConvaTec wound-care business. But in August, it sold ConvaTec to two private equity firms, Nordic Capital and Avista Capital Partners. The selling price was $4.1 billion.
The drug giant hoped to use those proceeds to buy smaller drug maker Imclone Systems Inc. It placed a bid of $4.5 billion for the 83% of the company it does not already own. Why does it want Imclone instead of Convatec? Because, like other drug companies before it, Bristol-Myers Squibb wants to focus on developing blockbuster drugs.