(Corrects Sfr-dollar conversion in fourth paragraph)
Dec 15 Swiss pharmaceutical manufacturer Lonza
Group AG said on Thursday it is buying Capsugel, a U.S.
maker of capsule products and other drug delivery systems, for
$5.5 billion in cash.
"The acquisition of Capsugel meets Lonza's strategic and
financial goals," Lonza Chief Executive Richard Ridinger said in
"It accelerates our healthcare continuum strategy by giving
us broader exposure to the fast-growing pharma and consumer
Lonza said it intended to raise new capital of up to 3.3
billion Swiss francs ($3.22 billion) to finance the deal,
expected to close in the second quarter of 2017 subject to
regulatory approval and closing conditions.
It also secured committed debt financing for the full
acquisition amount from Bank of America Merrill Lynch
and UBS. Jefferies LLC is Lonza's lead financial
adviser, the company said, while Goldman Sachs is sole financial
adviser to Capsugel.
Reuters reported on Monday that Lonza was in advanced talks
with private equity firm KKR & Co LP, Capsugel's current
Based in Morristown, New Jersey, Capsugel manufactures empty
two-piece hard capsules as well as finished dosage forms for
drug delivery. It serves more than 4,000 corporate customers in
over 100 countries and employs approximately 3,600 people across
13 facilities on three continents.
The Swiss group said it expected to achieve 30 million
francs of yearly operating synergies by the third year and 15
million francs in yearly tax synergies.
The deal includes refinancing of existing Capsugel debt of
approximately $2 billion.
Lonza said it intended to maintain its current dividend
policy and leverage of roughly three times net debt per earnings
before interest, tax, depreciation and amortisation.
($1 = 1.0245 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi; Editing by Subhranshu