Pfizer is selling its capsule-making business to the private equity firm Kohlberg Kravis Roberts for $2.375 billion in cash.
Capsugel, which has facilities around the world, including a sales office in Cambridge, was acquired by Pfizer in 2000 as part of its $90 billion takeover of Warner-Lambert. It generated about $750 million (£465 million) in revenues last year and manufactured more than 180 billion hard capsules.
Pfizer said in October that it was considering selling Capsugel and that it had hired Morgan Stanley as an adviser. Since then it is understood to have spoken to several interested private equity firms, including The Blackstone Group and Bain Capital.
The sale follows Pfizer’s decision in February to close its research and development site at Sandwich, Kent, at a cost of as many as 2,400 jobs. It will end its development of allergy and respiratory medicines, which has been based at Sandwich.
The sale of Capsugel may be followed by others, as Pfizer seeks to reconfigure its business and sell or spin-off non-pharmaceutical divisions as it faces the looming expiration of patent rights to several drugs, notably the cholesterol fighter Lipitor this year. The company noted that it would continue to identify acquisition targets.
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Pfizer said that it expected to make additional share repurchases this year as a result of the deal. The share buybacks would be in addition to its previously anticipated repurchase of about $5 billion planned for 2011. The company lowered its revenue targets for this year and next year as a result of the Capsugel deal.
Henry Kravis and George Roberts, co-founders and co-chief executives of KKR, said that they regarded Capsugel as a future potential growth play.
• GlaxoSmithKline is considering whether to appeal against a penalty of more than £10 millionimposed by the Supreme Court of India for overcharging for eczema and psoriasis medicines (Robin Pagnamenta writes). The ruling relates to a dispute between GSK and the Indian Government that dates back to the late 1970s, when India introduced new rules to ensure that the poor could afford certain drugs. Glaxo rejected the new rules, arguing that the prices for some drugs set by the Government were too low and did not take into account the cost of manufacturing them in bulk. GSK had defeated the Government in a High Court battle in 1991, but an appeal went to the Supreme Court of India, whose decision was finally handed down this week.