Lonza Sells Division to Lone Star
Swiss life sciences firm Lonza is divesting its Capsules & Health Ingredients division to private equity firm Lone Star Funds. This is a classic corporate carve-out, allowing Lonza to focus on its core business while Lone Star plans to run the unit as a standalone platform. The deal creates a new, focused player in the pharma and supplements ingredient space.
The transaction is valued at an enterprise value of CHF 2.3 billion, equivalent to approximately $3 billion. Lonza will receive CHF 1.7 billion ($2.2 billion) in immediate cash proceeds while retaining a 40% equity stake in the newly independent company. This deal structure provides Lonza with significant upfront capital while allowing it to benefit from future value creation. The total undiscounted proceeds for Lonza, including the eventual sale of its retained stake, are anticipated to be at or above CHF 3 billion (~$4 billion). For Lonza, this sale is the final and most critical step in its "One Lonza" strategy, completing its transformation into a pure-play Contract Development and Manufacturing Organization (CDMO). The company had previously divested its Personalized Medicines business, the MODA software platform, and a small molecules micronization site to streamline its focus. The influx of capital will be directed towards organic growth opportunities, bolt-on acquisitions in its core CDMO business, and a CHF 500 million share buyback program. This move sharpens Lonza's focus on its three remaining integrated platforms: Integrated Biologics, Advanced Synthesis, and Specialized Modalities. The divested Capsules & Health Ingredients (CHI) division demonstrated positive performance leading up to the sale, achieving 3.9% constant exchange rate sales growth in 2025 with a CORE EBITDA margin of 25.9%. This performance follows Lonza's major expansion into the sector via the $5.5 billion acquisition of Capsugel back in 2016. Lone Star Funds intends to operate the CHI division as a standalone entity, providing it with dedicated investment and strategic flexibility. The private equity firm plans to accelerate the division's growth and enhance its operational performance across the pharmaceutical and nutraceutical markets.
