Lonza becomes pure-play CDMO

Lonza has entered into a definitive agreement to divest its Capsules & Health Ingredients (CHI) business to Lone Star Funds for an enterprise value of $3 billion. The transaction is expected to close in 2H, subject to regulatory approvals and completing the legal separation of CHI.

The company described this as “the last and most significant step” in its transformation to a pure-play CDMO after two years of changes. It is also selling its Personalised Medicines business including the Cocoon Platform to Octane Medical Group, the Moda software platform to the parent company of Starlims and the small molecule micronisation site in Monteggio, Switzerland, to Microsize and Schedio Group. 

Under the terms of the deal, Lonza will receive $2.2 billion in cash and retain a 40% stake, with “additional preferential participation in its future exit”, depending on Lone Star receiving an initial return equal to its equity investment. This could raise final proceeds to around $4 billion in total.