Lonza acquires Capsugel for $5.5 billion
Capsule specialist Capsugel is acquired by major pharma player Lonza, and investment firm KKR.
The agreement means that Lonza will acquire Capsugel from KKR for 5.5 billion US dollars in cash, including refinancing of existing Capsugel debt of approximately $2 billion, through a transaction that has been approved by the boards of directors of both Lonza and Capsugel.
With the acquisition of Capsugel, Lonza will add an array of technologies and will expand the market reach of its contract development and manufacturing organisation (CDMO) and products businesses. It will also support Lonza’s strategy to get “closer to the patient and end consumer”, according to a statement from the firms.
The acquisition is expected to provide additional value for Lonza, in that it will be able to offer a portfolio of technologies including active pharmaceutical ingredients (APIs), excipients to dosage forms and delivery technologies.
In addition, the acquisition is expected to strengthen Lonza’s position in consumer healthcare and nutrition. The group said it will be “well positioned to meet the increasing need for optimised consumer health and nutrition through a wide offering of next-generation dosage forms”.
The combined business will also be able to leverage its bioavailability technology to create a new dietary ingredient-ready offering, as well as capitalise on its formulation expertise to develop new ingredients and to market new combination products.
Richard Ridinger, chief executive officer of Lonza, said: “The acquisition of Capsugel meets Lonza’s strategic and financial goals. It accelerates our healthcare continuum strategy by giving us broader exposure to the fast-growing pharma and consumer healthcare markets. We expect the transaction to be accretive to our core earnings per share in the first full year post closing.”
He added: “This new integrated approach will benefit our customers, who will gain from the simplicity and efficiency of working with one company that can provide world-leading support from APIs to excipients and dosage forms. The combined business will allow us to partner with our customers to help them bring highly differentiated products to market more quickly and efficiently.”
Guido Driesen, president and chief executive officer of Capsugel, said: “This transaction brings together two leading companies that share a common vision – to deliver real value to customers by accelerating their ability to develop and commercialise innovative pharmaceutical and healthcare products. The combination of our complementary technology platforms will put us in a strong position to benefit from evolving trends in the pharma and consumer healthcare markets.”
He added: “Both companies enjoy a strong quality and regulatory track record, and we believe that the combination enables us to provide the most complete set of tailored and integrated solutions for our customers. We look forward to bringing together our talented teams to deliver science- and engineering-based solutions to customers for the benefit of the patients and consumers who use their products. I am personally committed to making this integration a success.”
Pete Stavros, member of KKR and head of the industrials investing team, said: “Since acquiring Capsugel five years ago, we have supported Guido and his management team in repositioning the company from a global leader in hard capsules into a specialty CDMO. Capsugel has grown significantly by investing in innovation, strategic acquisitions, product development and geographic expansion. Now Capsugel is well positioned for the next phase of its growth, and we look forward to its continued success as a part of Lonza.”