Pfizer Selling Capsugel to KKR for $2.38 Billion, Could Set Stage For Other Divestitures
Pfizer and Kohlberg Kravis Roberts & Co L.P. recently announced they have entered into an agreement whereby an affiliate of KKR will acquire Pfizer’s Capsugel business for $2.375 billion in cash. Capsugel, a world leader in hard capsules and an innovator in drug delivery systems, generated approximately $750 million in revenue and manufactured more than 180 billion hard capsules in 2010.
“The transaction is an endorsement of Capsugel’s consistent success to date and its potential for future growth with KKR, a firm with deep industry expertise and a long history of partnering with market-leading businesses to take them to the next level,” said Guido Driesen, President and General Manager of Capsugel. “Capsugel’s employees and I are excited to work with KKR and eager to enhance the value of our business in partnership with our customers.”
Over the past 34 years, KKR has invested in more than 185 transactions with a total value of more than $435 billion. KKR’s current private equity portfolio includes over 60 portfolio companies with over $210 billion of annual revenues and more than 900,000 employees.
“Capsugel has an excellent portfolio and outstanding reputation for providing high-quality, innovative drug delivery solutions,” said Henry R. Kravis and George R. Roberts, Co-Founders, Co-Chairmen and Co-CEOs of KKR. “We look forward to working with Capsugel’s talented employees and investing in this business. We share Capsugel’s enthusiasm for its future potential to grow, develop, and continue to deliver an unmatched quality of products.”
Pfizer expects to make additional repurchases of its common stock on the open market during 2011 as a result of this transaction, assuming completion this year. Pfizer’s repurchases of its common stock funded by Capsugel sale proceeds would be in addition to the previously announced anticipated repurchase of approximately $5 billion of shares planned for 2011. Pfizer will also continue to look to identify and invest in other opportunities to maximize its value, including business development.
Capsugel is a world-leading provider of hard capsules and an innovator in drug delivery systems for the pharmaceutical, OTC, and health and nutrition industries. Capsugel offers a comprehensive array of products and services, from hard gelatin, vegetarian, and liquid-filled capsules, to innovative R&D equipment and liquid formulations as part of its Licaps Drug Delivery System.
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