Pfizer Inc said on Monday it will sell its Capsugel capsule-making business to private equity firm Kohlberg Kravis Robert & Co (KKR) for US$2.38 billion in cash.
In October, Pfizer said it would review options for Capsugel and might sell the company. Pfizer, which is the world’s biggest drugmaker, said it will use the proceeds of the sale to buy back additional stock and may use some of the funds to make other investments or deals.
PENDING APPROVAL
The New York company said it expects the deal to close during the third quarter, assuming regulators in the US, EU and other markets approve. Capsugel had US$752 million in revenue last year, up 2 percent from the previous year. Pfizer cut its revenue forecasts for this year and next year to reflect the sale.
LOWER REVENUE
Pfizer said it now expects US$65.2 billion to US$67.2 billion in revenue this year, lowered from US$66 billion to US$68 billion. The company cut its revenue forecast for next year to a range of US$62.2 billion to US$64.7 billion, from US$63 billion to US$65.5 billion.
Analysts expected Pfizer to report US$67.15 billion in revenue this year and US$63.38 billion next year, according to estimates compiled by FactSet.
The company has been tweaking its business since it acquired Wyeth in October 2009, including cutting research spending and eliminating thousands of jobs. Last month, it closed a US$3.6 billion acquisition of King Pharmaceuticals Inc, a pain drug maker based in Bristol, Tennessee.
Pfizer planned to buy back US$5 billion in stock this year, not including additional repurchases funded by the Capsugel sale.
STAYING PUT
Capsugel, based in New Jersey, made 180 billion hard capsules last year. Pfizer said Capsugel’s corporate headquarters will remain in New Jersey after the sale to KKR, which is based in New York. The business has about 2,800 employees worldwide.
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