Lonza Divests Capsules & Health Ingredients Business for $3 Billion

Lonza has entered into a definitive agreement to divest its Capsules & Health Ingredients (CHI) business to Lone Star Funds (“Lone Star”) for an enterprise value of CHF 2.3 billion ($3 billion). Lonza will realize upfront cash proceeds of CHF 1.7 billion ($2.2 billion) and retain a 40% stake in the business, with additional preferential participation in its future exit. Lonza’s proceeds on exit are subject to Lone Star receiving an initial return equal to its equity investment. The combination of significant upfront proceeds with the preferential participation in future exit proceeds and the sale of the retained stake in CHI at future exit provide an attractive value upside and future cash generation. Considering the leading position and strengths of the CHI business after its return to growth in 2025, the total undiscounted value of the proceeds for Lonza from the full exit from CHI, including upfront proceeds, proceeds from future sale of its retained 40% stake and preferential participation in exit proceeds, is expected to be at or above CHF 3 billion (~$4 billion).

The transaction is the last and most significant step to complete Lonza’s strategic portfolio transformation to a pure-play CDMO. Wider portfolio updates include agreements to divest the Personalized Medicines business including the Cocoon Platform to Octane Medical Group, the MODA software platform to the parent company of STARLIMS Corporation, and the small molecules micronization site in Monteggio (CH) to Microsize and Schedio Group. As a result, Lonza now operates across three complementary and integrated CDMO Business Platforms, all powered by the Lonza Engine as their unique set of strengths, leveraging cutting-edge science, smart technology and lean manufacturing for complex and emerging pharmaceutical modalities.

Wolfgang Wienand, CEO, Lonza, commented: “With the sale of CHI and the three other recent divestments, in less than two years, we have reshaped our company and activated our vision of One Lonza as a pure-play CDMO. We are now able to laser-focus on where we are strongest and can create most value for our customers, people and shareholders. On top of receiving significant upfront proceeds for re-investment in our world-leading CDMO business, we have been able to implement attractive mechanisms for Lonza to benefit from future value creation by CHI. Following a rigorous process, we are confident that Lone Star brings the necessary capabilities to lead CHI into a good future and create opportunities for the colleagues departing from Lonza. I thank the whole CHI team for their commitment to Lonza over many years and their continued support in the upcoming transition phase.”