Lonza Is Said to Tap BofA, Centerview for Sale of Capsules Unit

(Bloomberg) — Lonza Group AG has selected Bank of America Corp. and Centerview Partners to arrange the sale of its capsules and health ingredients business, according to people familiar with the matter, as part of the firm’s efforts to streamline its corporate structure.

The capsules unit could be worth at least €2.5 billion ($2.6 billion) in a deal, said one of the people, who asked not to be identified as the information is private. Deliberations are ongoing and details of a transaction could still change, the people said.

Representatives for BofA and Centerview declined to comment, while a representative for Lonza didn’t respond to several calls and emails seeking comment over several days.

Lonza is the world’s largest contract manufacturer of monoclonal antibodies, the technology behind a new class of Alzheimer’s drugs such as Eli Lilly & Co.’s donanemab. Chief Executive Officer Wolfgang Wienand aims to make Lonza a pure-play contract development company and has said he doesn’t believe Lonza to be the right owner of the capsules unit.

Lonza bought the capsule business in 2017 from buyout fund KKR & Co. for $5.5 billion in a push to focus more on health care. The business, dubbed CHI, hasn’t lived up to expectations. Last year, the division reported 1.05 billion francs ($1.1 billion) in sales, down about 9% from 2023, while its core earnings before interest, taxation, deprecation and amortizations fell 23% to 256 million francs, according to filings.

Shares of Lonza have risen nearly 10% since Wienand announced the divestment plan of the capsules business on Dec. 12. Lonza has a market value of about $48 billion.

A sale of Lonza’s capsules business would add to a flurry of exits by companies across Europe of businesses that are seen as underperforming or non-core including Nestle SA, which is partly exiting its water business. Unilever Plc is spinning off its ice cream unit for a primary listing in Amsterdam, with London and New York getting secondary listings.

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