KKR has agreed to sell Capsugel, a maker of capsules and other drug delivery products, to Lonza Group (SWX: LONN) for about $5.5 billion in cash, including the restructuring of about $2 billion in debt. KKR had acquired Capsugel in 2011 from Pfizer (NYSE: PFE) for $2.4 billion. The sale represents a 15.1x EV/adjusted-EBITDA multiple based on the 12 months ended September.
The exit continues a rapid-fire December for the private equity juggernaut—it's just one of a handful of billion-dollar deals in which KKR has participated so far this month.
For Lonza, a Swiss pharmaceutical company, the acquisition complements existing offerings in the pharma, consumer healthcare and nutrition sectors. The company anticipates operating synergies of CHF30 million (about $29.1 million) and tax synergies of about half that figure over "the mid- to long-term." Combined, Lonza and Capsugel recorded revenues of about $4.7 billion and adjusted EBITDA of roughly $1.1 billion.
The acquisition of Capsugel comes after Lonza had previously eyed a takeover of fellow drugmaker Catalent but the two businesses could not agree on a price, according to Reuters.
This most recent exit is expected to close in 2Q 2017.
Lonza’s share price dropped 4.6% Thursday to close trading at CHF161.80. Lonza secured committed debt financing for the acquisition from BofA Merrill Lynch and UBS, with Jenner & Block providing the company with legal advice.