Lonza Specialty Ingredients (LSI) operates at 17 production sites worldwide and employs approximately 2,800 people. The business is a leading supplier of microbial control solutions for professional hygiene and personal care products. It also offers custom development and manufacturing of specialty chemicals and composites to support the electronics, aerospace, food and agrochemical industries.

Lonza had announced in 2019 that it was evaluating options and may divest its chemicals business to focus its strategy on the more lucrative CDMO business. As a CDMO (Contract Development & Manufacturing Organization), Lonza is a leading development and manufacturing partner for pharmaceutical and biotech companies worldwide.

Both Bain Capital and Cinven have significant experience in the industrial sector and an established track record of successful investments in portfolio companies, according to Lonza. The two private equity bidders have shown strong and continued interest since the beginning of the formal sale process, confirming that they were the best home for the business and the right transaction partner for Lonza.

Options initially included a spin-off, a sale or an IPO, in addition to the possibility of continuing with LSI after all. In July 2020, Lonza announced its intention to sell the division, which generates around CHF 820 million in annual sales. In October, UBS, which is handling the transaction, prepared information documents for potentially interested parties. LSI could be valued at CHF 3 billion to CHF 3.5 billion, corresponding to ten to twelve times operating earnings (EBITDA), according to the Finanz & Wirtschaft newspaper.

In December, news agency Reuters reported that Lanxess was also in the running for the division, along with several financial investors. Other private equity firms interested in LSI included Advent, Carlyle and the Swiss Partners Group. Clariant was also originally mentioned as a possible interested party.

Albert M. Baehny, Chairman of Lonza, explained, "The announcement is the result of a comprehensive and robust selection process. Bain Capital and Cinven have demonstrated that they understand the value of the experience and expertise of our Specialty Ingredients employees. They have presented the most compelling industrial strategy and vision for the business. They are also keen to prioritize R&D and innovation, as well as invest in existing assets to unlock the potential of the business."

The transaction is expected to close in the second half of 2021, subject to customary closing conditions. The transfer of ownership is expected to proceed smoothly.