US capsule manufacturer Capsugel explores sale or IPO

Capsugel is planning to explore a sale or initial public offering that could value the US drug capsule manufacturer at more than $5 billion including debt, Reuters reported, citing people familiar with the matter.

Several companies have in recent weeks shown interest in buying Capsugel, including 3M Co, Danaher Corporation, Becton-Dickinson & Co, Thermo Fisher Scientific Inc, Bayer AG and Catalent Inc, the report said.

Private equity giant KKR & Co, which had acquired Capsugel in 2011 from Pfizer Inc for $2.4 billion, is preparing to run a sale process for the company later this year, and also explore the possibility of an IPO as an alternative to an outright sale, the report added.

Capsugel is expected to have earnings before interest, taxes, depreciation and amortization (EBITDA) this year of close to $400 million.

Based in Morristown, New Jersey, Capsugel manufacturers drug capsules. It also sells equipments for filling empty and liquid capsules, as well as equipments for sealing liquid capsules.

Capsugel was founded in 1931 in Detroit, Michigan and was a unit of Parke-Davis. Warner Lambert acquired Parke-Davis, including Capsugel in 1970. Pfizer purchased Warner Lambert in 2000.

It produces more than 200 billion hard capsules and more than 3 billion finished dosage units a year for more than 4,000 customers in over 100 countries.

Capsugel has a hard capsule manufacturing plant in Rewari in Haryana and office in Mumbai.