Lonza is at long last shedding its capsules and health ingredients (CHI) business in a private equity sale that could see proceeds of 3 billion Swiss francs ($4 billion) or more.
The deal turns over the business unit to Lone Star Funds for an enterprise value of 2.3 billion francs ($3 billion). Lonza will hold on to a 40% stake in the business and take home upfront cash of 1.7 billion francs ($2.2 billion), plus “additional preferential participation in its future exit,” the company explained in a March 6 press release.
However, Lonza’s proceeds on exit are dependent on Lone Star receiving an initial return that equals its equity investment, according to the company.
With all of that said, Lonza expects the un-discounted total value of its proceeds from the CHI exit to come out to “at or above” 3 billion francs ($4 billion).
Lonza had been looking for options to exit its CHI business since 2024, when it outlined a “One Lonza” plan to focus on its core business and emerge as a pure-play CDMO. Since then, the company has made other divestments that include offloading its Switzerland-based micronization facility to equipment provider Schedio Group for an undisclosed price and more recently selling its personalized medicine business to Octane Medical Group.
The latest move, however, is the “last and most significant step” to complete Lonza’s transformation, CEO Wolfgang Wienand commented.
“We are now able to laser-focus on where we are strongest and can create most value for our customers, people and shareholders,” the CEO explained. “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.”
Lone Star, meanwhile, has confirmed to Lonza that it will continue to maintain “high standards of service delivery and quality” for the business going forward. Lonza is “confident that Lone Star brings the necessary capabilities to lead CHI into a good future and create opportunities for the colleagues departing from Lonza,” Wienand added.
Now, the CDMO is free to focus on its three business platforms of integrated biologics, advanced synthesis and specialized modalities. The new business structure was officially implemented in April and merges several different operations areas into the three core platforms.
Lonza has had a transformative few years since Wienand stepped into the driver’s seat in 2024, when he left his role at the helm of Siegfried to take over at Lonza. Last year, Lonza generated 6.5 billion francs ($8.36 billion) in sales, which was aided by a return to growth for its now-separated CHI unit.
While it’s now slimming down, Lonza had once aimed to widen its offerings by entering the capsule space in 2016 with a $5.5 billion acquisition of Capsugel, a leading gelatin capsule maker.
The CHI business now operates across a wide network that includes capsule facilities in North America, Europe, China and other countries, plus ingredients plants and innovation centers across the globe, according to its website.
The transaction should close during the second half of this year, subject to closing conditions and the competition of the legal separation of CHI from Lonza’s wider business, although it has already been reporting CHI sales as “discontinued operations.”
Lonza will use the proceeds from the exit to fund organic growth opportunities and bolt-on acquisitions, it said, which was another core focus of its 2025 structural overhaul.
