Lonza has struck a definitive deal to sell its Capsules & Health Ingredients (CHI) division to private equity firm Lone Star Funds in a transaction valued at CHF 2.3 billion (about USD 3 billion), marking the final and largest step in the Swiss life sciences company’s push to become a pure-play contract development and manufacturing organization (CDMO).

 

Under the agreement, Lonza will receive CHF 1.7 billion (USD 2.2 billion) in upfront cash and retain a 40% stake in the CHI business, allowing it to benefit from future value creation when Lone Star eventually exits the investment. Lonza will also receive preferential participation in that future exit, though proceeds will come only after Lone Star recovers its initial equity investment.

 

Taken together—including upfront proceeds, the future sale of its retained stake and preferential exit participation—Lonza expects the total undiscounted value of the deal to reach or exceed CHF 3 billion (around USD 4 billion).

 

The divestment caps a sweeping portfolio overhaul that has reshaped Lonza around its core CDMO operations. Alongside the CHI sale, the company has also agreed to divest its Personalized Medicines business, including the Cocoon Platform, to Octane Medical Group; its MODA software platform to the parent company of STARLIMS Corporation; and its small-molecule micronization site in Monteggio, Switzerland, to Microsize and Schedio Group.

 

The transformation leaves Lonza focused on three integrated CDMO business platforms, powered by its proprietary Lonza Engine system that combines advanced science, digital technologies and lean manufacturing.

 

“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. We are now able to laser-focus on where we are strongest and can create most value for our customers, people and shareholders," Wolfgang Wienand, CEO, Lonza, commented.

 

"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. I thank the whole CHI team for their commitment to Lonza over many years and their continued support in the upcoming transition phase.”

 

Lonza said the proceeds from the sale will feed into its capital allocation framework to fund organic growth and targeted acquisitions, expanding capacity and technology in line with its One Lonza Strategy. The company is targeting low-teens sales growth at constant exchange rates over time with expanding margins under its CDMO Organic Growth Model™.

 

With capital spending expected to moderate in the coming years and the new cash infusion from the CHI sale, Lonza expects leverage to fall well below its target range. As a result, the company plans to return CHF 500 million to shareholders through a share buyback once the upfront proceeds are received.

 

Lonza said it will continue its progressive dividend policy and maintain an investment-grade credit profile aligned with its BBB+ rating from Standard & Poor's, which the company has retained since 2019.

 

For its part, Lone Star said it intends to invest in the CHI business while maintaining high service and quality standards for customers.

 

Following the sale, Lonza’s remaining stake in CHI will be recorded as an investment in an associated company, with Lonza acting as a minority shareholder without management control. 

 

The company expects to record an extraordinary non-cash impairment of about CHF 1.3 billion in its 2025 financial statements, largely tied to goodwill associated with CHI assets. The charge will be classified under discontinued operations and will not affect CORE EBITDA from continuing businesses.

 

The transaction is expected to close in the second half of 2026, subject to regulatory approvals and completion of the legal separation of the CHI unit from Lonza’s broader operations.