Lonza in advanced talks to buy US capsule products manufacturer Capsugel

Swiss pharmaceutical company Lonza Group AG is in advanced talks to buy US capsule products manufacturer Capsugel from its owner, private equity firm KKR & Co, for over $5 billion, Reuters reported on Sunday, citing people familiar with the matter.

KKR, which had acquired Capsugel from US drug giant Pfizer Inc. in 2011 for $2.4 billion, had put the New Jersey-based capsule products maker on the block through an auction and had attracted health care, industrial and Asian suitors.

Founded in 1931 in Detroit, Michigan, as a division of Parke-Davis, Capsugel was sold to Warner Lambert in 1970. Capsugel became a subsidiary of Pfizer after it acquired Warner Lambert in 2000.

Capsugel manufactures and sells drug capsules as well as sells equipment for filling empty and liquid capsules, and equipment for sealing liquid capsules.

It has more than 4,000 customers in over 100 countries and 13 manufacturing sites and three research and development centers in nine countries across three continents.

Its customers include companies that make branded, generic and specialty pharmaceuticals; biotech products; over-the-counter medicines; vitamins and dietary supplements.

Basel-based Lonza is one of the world's leading suppliers to the pharma & biotech and specialty ingredient markets.

Its products and services range from active pharmaceutical ingredients and stem-cell therapies to drinking water sanitizers, from industrial preservatives to microbial control solutions, bacteria and other pathogens, from the manufacture of vitamin B compounds and organic personal care ingredients to agricultural services and products.

The Swiss and Singapore-listed company has a market cap of $9.43 billion and generated sales of CHF 3.8 billion in 2015.

Lonza has recently been looking at acquisitions and had in August struck a deal to acquire InterHealth Nutraceuticals, a US-based maker of nutritional ingredients used in dietary supplements, for up to $300 million.

Media reports had also reported in April that Lonza was seeking to buy US drug delivery technology company Catalent Inc from private equity firm Blackstone Group. (See: Lonza Group tables bid for US drug delivery technology company Catalent)