Lonza strikes deal to acquire Capsugel

Swiss pharmaceutical and biotech ingredient supplier Lonza (VTX: LONN) announced today that it has now entered into a definitive agreement to acquire US capsule maker Capsugel from private equity firm KKR (NYSE: KKR), as rumored earlier this week.

The transaction is for $5.5 billion in cash, including refinancing of existing Capsugel debt of approximately $2 billion, through a transaction that has been approved by the boards of directors of both Lonza and Capsugel. The transaction will be financed with a combination of debt and equity financing. KKR acquired Capsugel in 2011 from US pharma giant Pfizer (NYSE: PFE) for $2.38 billion.

The deal is expected to close in the second quarter of 2017 and to be accretive to core earnings per share (EPS) in the first full year after closing.