Lonza Closes in on $5bn Capsugel Deal

12 Dec 2016 --- Capsugel, the US giant which makes capsules for the food industry, is close to being sold to the Swiss pharmaceutical company Lonza Group, which confirmed that it is in advances talks to buy it. Lonza hurried out a press statement this morning saying it had a “strong interest” in acquiring Capsugel, following press speculation about the impending deal which values Capsugel at more than $5bn.

Capsugel, which also makes drug delivery systems, is currently owned by the private equity company KKR which acquired the business from drug giant Pfizer for $2.4bn in 2011.

KKR is now looking to offload the business as part of an auction, in which Lonza has emerged as the leading buyer among a mix of healthcare and industrial companies suitors, according to reports.

Lonza makes a range of personal care and healthcare products and has been looking to expand its footprint in the US by making acquisitions in the biopharma sector. 

Earlier this year, it was reported that Lonza, which serves more than 4,000 corporate customers in over 100 countries, attempted to buy the drug-development company Catalent for around $4 billion.

By acquiring Capsugel, which has a market value of over $9bn, Lonza would enhance its life sciences capabilities

Capsugel has utilized its pharmaceutical steeped technology into the health & nutrition sphere. 

Currently, approximately two-thirds of Capsugel’s global business comes from biopharma and about one-third from consumer health and nutrition. Its range of capsules used in the food industry include specialized gelatin and vegetarian capsules, including non-GMO certified capsules.

Capsugel, under KKR, has also undergone a spate of acquisitions, including the Bend Research Oregon-based business it acquired in 2013, which gave it access to patented technology for taste masking and bioenhancement.

Lonza said: “Lonza Group notes the recent press speculations that it is in final negotiations with KKR regarding the potential acquisition of Capsugel. Lonza confirms that it has expressed a strong interest in this successful company as it would fit perfectly with Lonza’s Healthcare Continuum strategy and strengthen its position as leading supplier to a number of important healthcare markets.”

“A successful acquisition would be value adding and be within Lonza’s stated acquisition criteria.”

“Lonza emphasizes that there can be no certainty as to the outcome of the discussions or whether an acquisition will be completed. More detailed information will follow in case of any significant developments.”

According to one report, Lonza could finalize a deal as early as this week. 

A recent interview in The World of Food Ingredients discussed ongoing business plans and development at Capsugel in detail. You can read the interview here.
 
By John Reynolds