Lonza Completes $5.5-Billion Acquisition of Capsugel
Lonza, a contract manufacturer of active pharmaceutical ingredients, has completed its acquisition of Capsugel, a provider of dosage forms, from the private equity forum, KKR, for $5.5 billion in cash, including refinancing of existing Capsugel debt of approximately $2 billion.
With the acquisition of Capsugel, Lonza positions itself in the drug-product services sector by gaining oral dosage delivery technologies, including a position in hard-capsule technologies.
The acquisition follows Lonza’s opening in November 2016 of a new 1,300-square-meter facility in Basel, Switzerland with drug-product services laboratories with an initial focus on formulation development, drug product analytical development, and quality control. The new facility’s services include options for monoclonal antibodies, other biologics, drug conjugates, peptides, and small molecules that require a parenteral dosage form with the following services: particle testing, container-closure integrity testing, and detection of trace impurities in pharmaceutical products, such as extractables and leachables from plastics used in manufacturing.
Capsugel has made recent investments. In 2016, it made several key acquisitions: Xcelience, a Florida-headquartered contract development and manufacturing organization specializing in clinical trial material supply and small-scale commercial manufacturing, and Powdersize, a Quakertown, Pennsylvania-based specialist in micronization. In 2015, it completed construction of a new pharmaceutical spray-dried dispersion (SDD) commercial manufacturing facility at its site in Bend, Oregon. The completion represented the final phase of a two-year, $25-million investment to expand its commercial SDD capability at the site. In 2015, it announced plans to invest more than $25 million to increase production capacity and deliver further quality enhancements for its vegetarian capsules.
Capsugel’s business will continue to operate in its existing structure until the full integration has been completed. Lonza expects to achieve the following synergies: CHF 30 million ($31.2 million) in operating synergies; approximately CHF 15 million ($15.6 million) in tax synergies by year three after closing; and approximately CHF 100 million ($104 million) in top-line synergies in the mid- to long-term.