KKR agrees $2.3bn pharmaceutical carve-out

The firm, which has agreed to buy Pfizer’s hard capsule manufacturer Capsugel, has completed numerous healthcare-related deals and also has ‘significant’ experience with ‘carve out’ deals.

Kohlberg Kravis Roberts has agreed to pay $2.3 billion to buy pharmaceutical giant Pfizer’s drug delivery systems business called Capsugel.

Capsugel generated about $750 million in revenue and manufactured more than 180 billion hard capsules in 2010.

The firm’s industrials team is leading the Capsugel investments, according to a person with knowledge of the deal.

The deal is expected to close in the third quarter of 2011. Capsugel will keep its global headquarters in New Jersey, and all Pfizer employees dedicated to the business will be transferred to Capsugel.

KKR has had a presence in healthcare-related industries, having made several investments in past years, including its massive deal for hospital operator HCA. HCA recently held the largest-ever private equity-backed initial public offering, raising $3.79 billion by selling 126.2 million shares at $30 each.

KKR’s previous past healthcare-related investments include medical device design services company Accellent, drug store chain Alliance Boots, Nordic-based healthcare company Ambea, orthopedics product maker Biomet and Jazz Pharmaceuticals.

The firm also looks for corporate “carve out” type investments,  in which the firm buys a business unit from a corporation and turns it into “their own thriving enterprise”, a KKR spokesperson said. “We have completed dozens of such transactions, including 10 in the last five years,” the spokesperson said.