Johnson & Johnson is preparing a potential sale of its orthopedics unit DePuy Synthes in a transaction that could exceed $20bn, Bloomberg reported.

Several large private equity firms are considering forming a consortium to pursue the asset, according to people familiar with the matter. Discussions remain at an early stage and may not lead to a deal.

DePuy Synthes generated $9.3bn in sales last year and manufactures devices used in hip and knee replacements. The unit is one of the largest orthopedics businesses globally.

J&J announced plans in October to separate the slower-growing division within 18 to 24 months. At the time, Chief Financial Officer Joseph Wolk said the company was preparing for a potential spinoff but was “open to ideas that others might have,” including a sale or alternative transaction if it delivered greater value.

Bloomberg Intelligence estimates the business could be valued at up to $28bn including debt. A transaction above $20bn would rank among the largest recent sponsor-backed healthcare buyouts.

Private equity firms have grown more confident pursuing large-scale healthcare assets following major take-private transactions last year. Acquiring DePuy Synthes would allow sponsors to deploy significant capital into a defensive, cash-generative medical technology platform.

If you think we missed any important news, please do not hesitate to contact us at [email protected].

Can`t stop reading? Read more.