Switzerland's Lonza last month said it had whittled down a shortlist of bidders for its specialty ingredients business. Now, with buyers in place, the CDMO is in line for a big payout in the second half of the year.
Lonza has agreed to sell off its specialty ingredients business to Bain Capital and Cinven for a whopping 4.2 billion CHF ($4.7 billion). The move should give the company some breathing room to focus on its Pharma Biotech & Nutrition segment, currently tapped in the manufacturing push for Moderna’s mRNA vaccine and AstraZeneca’s experimental COVID drug—plus, a hefty chunk of change to accelerate its own plans.
If the deal closes in the second half of the year as expected, Lonza will hand over the entirety of the business and operations, which comprises 17 global manufacturing sites and some 2,800 employees. The unit cranks out anti-dandruff ingredients, hygienic solutions for commercial launderers, disinfectants and more.
The business also performs custom development and production of specialty chemicals and composites for the electronics, aerospace, food and agrochemical fields. The parties say they expect the transition to be seamless for customers and employees alike.
“The sale of the Specialty Ingredients business will allow Lonza to focus on its position as a leading partner to the healthcare industry, and the free cash flows resulting from the sale will allow us to accelerate our strategic priorities,” Albert Baehny, chairman of Lonza, said in a statement.
The focus now, once Lonza is unshackled from its ingredients business, is to become a “pure-play partner to the healthcare industry,” the company said.
A specialty ingredients cast-off had been part of Lonza’s plans for some time, but it isn’t the CDMO’s first slim-down this year: The company in January said it would sell a pair of French and Scottish plants to British CDMO NextPharma. Both facilities produce lipid-oral dose drugs as liquid-filled hard capsules and softgels. With news of the upcoming divestment, Lonza added that it was exiting the pharma market for both products—though it said it would continue to make Licaps-branded lipid capsule products for nutritional and consumer health customers.
Meanwhile, the company last year established itself as one of the manufacturers to beat in the fight against COVID-19, courtesy of a 10-year production pact for Moderna’s mRNA-based vaccine. Lonza is also on deck to produce Humanigen’s COVID-19 antibody lenzilumab, as well as AstraZeneca’s experimental antibody AZD7442.
That work, coupled with Lonza’s non-COVID manufacturing duties, helped the company gin up 4.5 billion CHF ($5 billion) in 2020, marking a 12% jump over its 2019 revenue haul. Performance was largely buoyed by the company’s Pharma Biotech & Nutrition segment, which itself delivered 12.2% sales growth, the company said.