Private markets specialist Apollo Global Management LLC (APO.US) is in discussions to purchase the orthopedics division DePuy Synthes from Johnson \u0026 Johnson (JNJ.US), according to individuals familiar with the matter. The potential transaction could assign a valuation of roughly $20 billion to the business unit.

An agreement might be finalized within the coming weeks, the report indicated. While the division has drawn interest from multiple private equity firms, the healthcare giant may alternatively choose to spin off the unit as a standalone publicly traded company. Earlier reports had suggested that Johnson \u0026 Johnson was preparing to divest its orthopedics arm and viewed private equity buyers as the most likely acquirers.

These negotiations coincide with a surge in private equity appetite for healthcare businesses. American Industrial Partners completed its $1.27 billion acquisition of Avanos Medical in April, while Blackstone Inc. (BX.US) and TPG Inc. (TPG.US) reached a deal in 2025 to acquire Hologic, a women's health diagnostics company, for more than $18 billion.

DePuy Synthes, which manufactures joint implants and surgical instruments, generated $9.3 billion in revenue in 2025, though growth was a modest 1.1% year over year. By comparison, Johnson \u0026 Johnson\u2019s total revenue climbed 6% in 2025. The innovative pharmaceuticals segment expanded 6%, while the broader medical technology business grew 6.1%. Within med tech, the cardiovascular franchise posted a robust 15.8% revenue jump, driven by strong contributions from Abiomed and Shockwave Medical. Surgical procedures grew at a steady 3%.

Separately, the company\u2019s hip replacement devices are facing thousands of pending lawsuits. Johnson \u0026 Johnson announced last year that it planned to separate DePuy Synthes into an independent company within 18 to 24 months. This would represent the company\u2019s second major divestiture as it sharpens its focus on faster-growing healthcare segments.

Chief Financial Officer Joe Wolk has previously stated that Johnson \u0026 Johnson is exploring multiple avenues for the separation, with a primary emphasis on a tax-free spin-off while remaining open to alternative structures. He added that the process has already commenced, and no significant updates on the transaction are expected until mid-2026.