Lonza to Acquire Capsugel

After a brief lull in contract services mergers and acquisitions activity, 2016 will close with a major announcement from Lonza that it will acquire Capsugel for $5.5 billion in cash, including refinancing of existing Capsugel debt of approximately $2 billion. The transaction has been approved by the boards of directors of both companies and is expected to close in the second quarter of 2017.

The integrated company will offer a portfolio of APIs, excipients, dosage forms, delivery technologies for both small- and large-molecule drugs. In a press statement announcing the acquisition, Lonza noted that the transaction is “fully in line with Lonza’s stated strategy to accelerate growth and deliver value along the healthcare continuum by complementing its existing offerings and by opening up new market opportunities in the pharma and consumer healthcare and nutrition industries.”

The acquisition also will allow Lonza to expand the market reach of its contract development and manufacturing organization (CDMO) and products businesses. The deal is expected to strengthen the company’s position in consumer healthcare and nutrition as an integrated service provider of active ingredients, oral dosage forms, development services, and delivery technologies.

The press statement noted that the acquisition of Capsugel “will allow cross-selling of existing products, combine manufacturing solutions and services, and create an integrated value offering that merges Lonza’s ingredients with Capsugel’s dosage forms.”

The initial focus of the transaction is to ensure a seamless integration while continuing the growth trajectory of the Capsugel business. The transaction will be financed with a combination of debt and equity financing, Lonza reports. 

Source: Capsugel and Lonza