Lonza sells capsule business to Lone Star for $3bn

June 2026 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

June 2026 Issue

In early March, Lone Star Funds announced an agreement to acquire the Capsules & Health Ingredients (CHI) division of Lonza Group AG in a transaction valued at $3bn.

The deal, unveiled on 6 March 2026, is expected to close in the second half of 2026, subject to customary regulatory approvals and the completion of the legal separation of CHI from Lonza’s remaining operations.

Under the agreed structure, Lonza will receive upfront cash proceeds of $2.2bn and retain a 40 percent equity stake in the business. It will also benefit from preferential participation in a future exit, although any proceeds from that exit are subject to Lone Star first receiving a return equal to its equity investment. This combination provides Lonza with near-term cash generation and longer-term upside.

Lonza has indicated that, following CHI’s return to growth in 2025, the total undiscounted value of proceeds from a full exit, including upfront cash and the eventual sale of its retained stake, is expected to be at or above $4bn.

“With the sale of CHI and the three other recent divestments, in less than two years we have reshaped our company and activated our vision of One Lonza as a pure-play CDMO,” said Wolfgang Wienand, chief executive of Lonza. “We are now able to laser-focus on where we are strongest and can create most value for our customers, people and shareholders. On top of receiving significant upfront proceeds for re-investment in our world-leading CDMO business, we have been able to implement attractive mechanisms for Lonza to benefit from future value creation by CHI.

“Following a rigorous process, we are confident that Lone Star brings the necessary capabilities to lead CHI into a good future and create opportunities for the colleagues departing from Lonza,” he continued. “I thank the whole CHI team for their commitment to Lonza over many years and their continued support in the upcoming transition phase.”

From the buyer’s perspective, Lone Star views CHI as a high-quality carve-out that can benefit from renewed strategic focus as an independent business. “We see significant opportunity for CHI as a standalone business,” said Donald Quintin, chief executive of Lone Star. “The company has leading positions, a global footprint and a strong heritage of product quality and innovation. We believe that, as an independent operator, CHI will benefit from greater strategic flexibility and dedicated investment to accelerate growth, enhance operational performance and continue delivering value to customers worldwide.”

Lonza first signalled its intention to exit the CHI business in 2024 as part of its One Lonza strategy, which aims to position the Swiss group as a focused, pure-play contract development and manufacturing organisation. Since then, the company has executed divestments intended to streamline its portfolio and concentrate capital and management attention on higher-growth CDMO activities. These have included the sale of its Switzerland-based small molecules micronisation facility to equipment provider Schedio Group and the divestment of its personalised medicine business, including the Cocoon platform, to Octane Medical Group.

According to Lonza, the upfront proceeds from the CHI transaction will be allocated to its discretionary cash pool under the group’s capital allocation framework. The funds are intended to support organic growth projects and selective bolt-on acquisitions aligned with the One Lonza strategy. In addition, Lonza has confirmed plans to return CHF500m to shareholders through a share buyback programme following receipt of the upfront cash.

Lone Star is a global investment firm advising funds that invest across private equity, credit and real estate. Since raising its first fund in 1995, the firm has organised approximately 25 funds with aggregate capital commitments of about $95bn.

Richard Summerfield