Lonza agrees to acquire Capsugel for $5.5bn

The deal includes refinancing of existing Capsugel debt of about $2bn. KKR acquired Capsugel from Pfizer for $2.4bn in 2011.

Based in Morristown, New Jersey, Capsugel is engaged in the design, development and manufacturing of a range of new dosage forms for the biopharmaceutical and consumer health and nutrition industries.

It serves over 4,000 corporate customers in more than 100 countries.

The company has 13 manufacturing sites and three research and development centers in nine countries across three continents. 

Lonza said the acquisition will extend the market reach of its contract development and manufacturing organization and products businesses.

In particular, the deal is expected to strengthen Lonza's position in the consumer healthcare and nutrition sector via the provision of active ingredients, oral dosage forms, development services, and delivery technologies.

Lonza expects to achieve about CHF30m in operating synergies annually, by the third year, and CHF15m in annual tax synergies.

Mid-to-long-term topline synergies of about CHF100m per year are estimated.  The transaction is expected to be earnings accretive from the first full year after closing.

The deal is expected to be completed in the second quarter of 2017, subject to regulatory approval and closing conditions.

Lonza CEO Richard Ridinger 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.”

Image: Lonza agrees to acquire Capsugel for $5.5bn. Photo: courtesy of stockimages at FreeDigitalPhotos.net.