Capsugel eyeing IPO or sale for $5B+

Drug-delivering capsule maker Capsugel is eyeing a sale or IPO worth more than $5 billion including debt, which would represent a more than doubling of the price paid by its private equity owner KKR in 2011, when it acquired the company from Pfizer ($PFE).

The list of possible suitors who have expressed interest include 3M ($MMM), Danaher ($DHR), Becton Dickinson ($BDX), Thermo Fisher Scientific ($TMO), Bayer and Catalent ($CTLT), Reuters reports.

Under KKR's tutelage, Capsugel's pre-tax earnings doubled to $400 million. Along the way, the manufacturer picked up smaller players like specialized contract developer Xcelience, particle size reduction player Powdersize and manufacturer Encap Drug Delivery. In addition, the company recently said it is investing $25 million to up production of vegetarian capsules at four sites around the world, including Mexico, France and Japan.

Morristown, NJ's Capsugel's drug delivery offerings include Duocap Capsules for dual release products, Coni-Snap Sprinkle Capsules for patients with difficulty swallowing and DBcaps for double-blind clinical trials. Its Dosage Form Solutions unit also helps with the design of clients' technology platforms and development of new formulations.

In January the company acquired intellectual property to improve the solubility of drugs in lipid-based liquid, semi-solid and multiparticulate formulations developed at Melbourne, Australia's Monash University.

- read the Reuters article