Switzerland’s Lonza closes sale of $4.5bn specialty ingredients division

LONDON (ICIS)–Lonza has completed the sale of its specialty ingredients business to a private equity consortium of Bain Capital and Cinven for an enterprise value of Swiss francs 4.2bn ($4.5bn), in a move to become a pure-play provider to the healthcare industry, the firm said.

Marc Doyle, the former DuPont specialty products division COO who headed company from June 2019 to February 2020, is set to become the CEO of the business. Doyle is expected to step into the role as soon as the sale closed.

Announced in February, the sale includes  17 manufacturing sites, 11 research centres and 2,800 employees, and  will remain headquartered in Basel, Switzerland.

The divestment is part of a wider move by Lonza, which has focused in recent years on the pharmaceutical, nutrition, specialty ingredients and biotechnology sectors, to reposition itself as a purely healthcare-oriented producer, according to Lonza chairman Albert Baehny.

“Since announcing  our intention to divest the specialty ingredients business, we have made significant progress in consolidating our new structure and identity and refining our focus as a pure-play partner to the healthcare industry,” he said.

In a statement, Bain highlighted Lonza Specialty’s market position as a producer of ingredients for the disinfectants, sanitizers, personal care and preservatives sectors, which have seen sharp increases in demand since the onset of the coronavirus pandemic.

The strong intellectual property protections for many of its products, and the projected growth for anti-microbial materials were significant drivers behind plans to acquire the business, according to the firm.

“Our strategy is to reinforce the company’s market position, to accelerate growth through further investment in R&D and innovation, and to use LSI as a platform for further industry consolidation, in line with Bain Capital’s and Cinven’s strategies in other sector,” said Bain managing director David Danon.

The new owners are looking to use the business as a vehicle for bolt-on acquisitions in the anti-microbial and biocidal solutions market. The business will also concentrate research spending in that area. which they describe as fragmented at present, and invest in the company’s Visp, Switzerland, manufacturing complex.

Front page picture: Lonza’s headquarters in Basel, Switzerland
Source: Lonza