Lonza completes CDMO pivot with USD3B sale of capsule business to Lone Star

SWEDEN—Lonza has finalized the sale of its capsules and health ingredients (CHI) business to Lone Star Funds, marking the final chapter in its transformation into a pure-play contract development and manufacturing organization.

The pharmaceutical giant announced the transaction on March 6, revealing an enterprise value of 2.3 billion Swiss francs (USD 3 billion) for the business unit.

Under the deal structure, Lonza will retain a 40% stake in CHI while receiving an upfront cash payment of 1.7 billion Swiss francs (USD 2.2 billion).

The company also secured additional preferential participation in future exit proceeds, though these returns depend on Lone Star first recovering its initial equity investment.

Lonza expects the total undiscounted value of its proceeds to reach at least 3 billion Swiss francs (USD 4 billion) when the business exits again.

Completing the one Lonza strategy

The divestment represents the culmination of Lonza’s “One Lonza” strategic plan, launched in 2024 to focus exclusively on its core CDMO operations.

CEO Wolfgang Wienand described the move as “the last and most significant step” in completing this transformation.

“We are now able to laser-focus on where we are strongest and can create most value for our customers, people, and shareholders,” Wienand stated.

He emphasized that the upfront proceeds will enable reinvestment in Lonza’s world-leading CDMO business while maintaining mechanisms to benefit from CHI’s future value creation.

The sale follows other recent divestments, including the transfer of a Switzerland-based micronization facility to equipment provider Schedio Group and the sale of its personalized medicine business to Octane Medical Group.

Refocusing on three core platforms

With CHI now departing, Lonza will concentrate entirely on three business platforms: integrated biologics, advanced synthesis, and specialized modalities.

The company officially implemented this new structure in April, consolidating various operations areas into these core platforms.

Lone Star Funds has committed to maintaining high standards of service delivery and quality for the CHI business.

Wienand expressed confidence that the private equity firm possesses the necessary capabilities to lead CHI toward a promising future while creating opportunities for departing employees.

From expansion to streamlining

The transaction represents a significant strategic reversal for Lonza, which entered the capsule space in 2016 through a USD5.5 billion acquisition of Capsugel, a leading gelatin capsule manufacturer.

The CHI business now operates capsule facilities across North America, Europe, China, and other countries, alongside ingredients plants and innovation centers worldwide.

Wienand assumed leadership in 2024 after leaving his position at Siegfried. Under his direction, Lonza generated 6.5 billion Swiss francs (USD8.36 billion) in sales last year, with the CHI unit contributing to this growth before its separation.

The transaction should close during the second half of this year, pending regulatory approvals and completion of CHI’s legal separation from Lonza’s broader operations.