Lonza pays $5.5bn for Capsugel

20 Dec 2016

Lonza and Capsugel have entered into a definitive agreement under which Lonza will acquire Capsugel for $5.5 billion. The acquisition is said to be fully in line with Lonza’s stated strategy to accelerate growth.

Lonza pays $5.5bn for Capsugel

Lonza and Capsugel have entered into a definitive agreement under which Lonza will acquire Capsugel for $5.5 billion. The acquisition is said to be 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. With the acquisition of Capsugel, Lonza says it will add a trusted brand with a large breadth of technologies and will expand the market reach of its contract development and manufacturing organization (CDMO) and products businesses. It will also support Lonza’s strategic ambition of getting closer to the patient and end consumer.

Lonza said that the acquisition is designed to create a leading integrated, value-added solutions provider in drug development, formulation, delivery technologies and manufacturing for the global pharma and consumer healthcare industries. The combined business will, it believes, be well positioned to benefit from the dynamics in these industries and to anticipate and address technology trends in order to support the evolving needs of its customers. It will provide additional value by offering an integrated portfolio of industry-leading technologies, from active pharmaceutical ingredients (APIs) through excipients to dosage forms and delivery technologies.

With the addition of Capsugel’s oral dosage delivery technologies, including its leading position in hard capsule technologies, Lonza believes it will become the partner of choice for its pharma customers along the entire value chain. The combined technologies and offerings will, it says, provide customers innovative solutions in both large and small molecules and solidify Lonza’s position as the partner best able to support the pharma industry by bringing new, differentiated medicines to market rapidly and efficiently.

In addition, the acquisition is expected to strengthen Lonza’s position in consumer healthcare and nutrition as Lonza becomes a fully integrated and innovative service provider of active ingredients, oral dosage forms, development services and delivery technologies. As a result Lonza believes it will be well positioned to meet the increasing need for optimized 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 capitalize on its formulation expertise to develop new ingredients and to market new combination products.

The enlarged business would have had combined 2015 revenues of approximately CHF 4.8 billion and adjusted EBITDA of approximately CHF 1.1 billion.