KKR closing on $5bn pharma exit

KKR is close to selling capsule maker Capsugel to Swiss drug maker Lonza for more than $5bn.

KKR is closing on a deal to sell capsule maker Capsugel to Swiss pharmaceutical maker Lonza for more than $5 billion.

Lonza confirmed that it is in talks with KKR regrading the potential acquisition of the drug and dietary capsule maker. A source told Private Equity International sister title Private Healthcare Investor the reported $5 billion price tag is “in the range” of what the final deal price is expected to be.

The firm declined to comment.

“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 a leading supplier to a number of important healthcare markets,” the company said in a statement.

KKR acquired New Jersey-based Capsugel from Pfizer in April 2011 for $2.375 billion in cash. At the time the company generated approximately $750 million in revenue. The initiated an auction process for the business earlier this year.

During its ownership KKR has funded a number of add-on acquisitions including services firm Xcelience and dosage manufacturer Encap Drug Delivery.

The sale would be the second billion-dollar plus exit for the firm in six months after it sold Indian generic injectable pharmaceutical products company Gland Pharma Limited to Chinese healthcare provider Shanghai Fosun Pharmaceutical for $1.26 billion in July.

In August the firm, alongside TPG, sold its remaining stake in orthopaedic product maker Zimmer Biomet for $965 million.