Lone Star Funds Signs Agreement to Buy Lonza’s Capsules and Health Ingredients Division
Lone Star Funds has announced a major strategic investment through an agreement to acquire the Capsules & Health Ingredients (CHI) business from Lonza Group AG, marking a significant development in the global pharmaceutical and nutraceutical manufacturing landscape. The acquisition will be carried out by a subsidiary of Lone Star Fund XII, LP, one of the private equity firm’s investment vehicles. While Lone Star will take majority ownership of the business, Lonza will maintain a 40% equity stake, allowing the Swiss life sciences company to remain an important partner in the venture.
The transaction reflects Lone Star’s growing focus on acquiring high-quality businesses with strong global market positions and long-term growth potential. At the same time, the agreement provides Lonza with an opportunity to optimize its portfolio while continuing to benefit from the future growth of the CHI business through its retained minority ownership.
Overview of the Capsules & Health Ingredients Business
The Capsules & Health Ingredients (CHI) division is headquartered in Basel, Switzerland, and operates on a global scale. Its operations extend across key markets in the Americas, Europe, and the Asia-Pacific region, enabling the company to serve pharmaceutical, nutraceutical, and consumer health customers worldwide.
Over the years, CHI has established itself as a recognized provider of capsule technologies, dosage solutions, and specialized health ingredients used in a wide range of products. These include prescription medications, dietary supplements, functional foods, and wellness products. The division’s global footprint and strong technical capabilities have allowed it to build long-standing relationships with pharmaceutical companies, supplement manufacturers, and health-focused consumer brands.
The CHI business is organized into three primary segments, each playing a critical role in the development, manufacturing, and delivery of healthcare and wellness products.
Empty Hard Capsules Segment
One of CHI’s core business areas is the production of empty hard capsules, which are widely used in the pharmaceutical and nutraceutical industries. The company is a leading global manufacturer of both gelatin-based capsules and plant-based capsules, offering solutions tailored to the needs of drug developers and dietary supplement companies.
Gelatin capsules have traditionally been the most common delivery format for oral medications and supplements due to their ease of swallowing, reliable dissolution, and manufacturing flexibility. However, the demand for plant-based capsules has been growing rapidly as consumers increasingly seek vegetarian, vegan, and clean-label products. CHI has developed innovative plant-derived capsule technologies to meet this demand.
Through advanced manufacturing processes and strict quality standards, the company provides capsule solutions designed to maintain product stability, ensure accurate dosing, and support efficient large-scale production for customers around the world.
Dosage Form Solutions
Another important segment within CHI is its dosage form solutions business. This division provides an end-to-end development and manufacturing platform that supports pharmaceutical and nutraceutical companies throughout the product lifecycle.
Services in this segment can include formulation development, encapsulation technologies, manufacturing support, and other specialized production capabilities required to bring products from concept to market. By offering integrated solutions, CHI helps customers accelerate product development timelines and maintain consistent quality standards.
This segment is particularly valuable for companies looking to launch new supplements or medicines without building their own manufacturing infrastructure. By partnering with CHI, these organizations gain access to advanced technology, experienced development teams, and scalable production capabilities.
Health Ingredients
The third major segment of the CHI business focuses on health ingredients, which are scientifically validated and trademarked components used in nutritional products. These ingredients are designed to support key areas of health and wellness, including energy, active lifestyles, and general well-being.
The company develops and supplies ingredients that are backed by research and formulated for incorporation into dietary supplements, functional foods, and health beverages. As consumer awareness of preventive health and wellness continues to grow, demand for evidence-based nutritional ingredients has expanded significantly.
Through this segment, CHI works with manufacturers and brands to develop products that meet consumer expectations for effectiveness, safety, and quality.
Strategic Rationale Behind the Acquisition
Lone Star sees the CHI business as a high-quality global platform with strong fundamentals and significant potential for future growth. According to the investment firm, the company stands out due to its technical expertise, diverse product offerings, and well-established relationships with customers across the pharmaceutical and nutrition industries.
As an independent organization under Lone Star’s ownership, CHI is expected to benefit from a renewed focus on operational efficiency, innovation, and strategic expansion. The firm believes that separating the business from its current corporate structure will allow it to pursue new opportunities more quickly and allocate resources more effectively.
Lone Star also highlighted the attractive nature of the markets in which CHI operates. The pharmaceutical and nutraceutical sectors are experiencing strong demand globally, driven by factors such as aging populations, increasing interest in preventive healthcare, and rising consumption of dietary supplements.
These trends are expected to create long-term opportunities for companies involved in capsule manufacturing, formulation technologies, and health ingredient development.
Leadership Perspective
Commenting on the transaction, Donald Quintin, Chief Executive Officer of Lone Star, emphasized the company’s confidence in the CHI business and its growth prospects.
He noted that CHI already holds strong positions in its key markets and has built a reputation for quality, reliability, and innovation. According to Quintin, these qualities provide a solid foundation for further expansion and development.
Quintin explained that operating as an independent company could provide CHI with greater strategic flexibility. This could enable the business to make faster decisions, invest more directly in innovation, and pursue targeted growth initiatives in its core segments.
Lone Star also expressed enthusiasm about collaborating with both the CHI leadership team and Lonza as the company transitions into its new structure.
Lonza’s Continued Involvement
Although Lone Star will assume majority ownership of the business, Lonza will remain involved through its 40% equity stake. This arrangement allows Lonza to continue benefiting from the success of the CHI business while focusing more closely on its broader strategic priorities in the life sciences sector.
Maintaining a minority stake also ensures that Lonza remains aligned with the long-term success of the business and can contribute its expertise and industry relationships where appropriate.
Future Outlook for CHI
Once the transaction is completed, CHI will operate as an independent company with a global presence and a clear focus on its core capabilities. Lone Star intends to support the company through investments aimed at improving operational performance, enhancing research and development, and expanding market reach.
Innovation will likely play a central role in the company’s future strategy. As the healthcare and wellness industries continue to evolve, companies that can deliver advanced capsule technologies, reliable manufacturing services, and high-quality health ingredients are expected to remain in strong demand.
By strengthening its capabilities in these areas, CHI aims to expand its customer base and maintain its position as a trusted partner to pharmaceutical and nutraceutical companies worldwide.
Transaction Timeline and Conditions
The agreement between Lone Star and Lonza has been formally signed, but the transaction has not yet closed. Completion of the acquisition will depend on the fulfillment of customary closing conditions, including regulatory approvals and other standard requirements associated with large international transactions.
Once these conditions are satisfied, the ownership transition will move forward and CHI will begin operating under its new structure.
The planned acquisition of Lonza’s Capsules & Health Ingredients business by Lone Star represents a significant shift in the global health manufacturing landscape. By combining Lone Star’s investment strategy with CHI’s established capabilities, the companies aim to unlock new opportunities for growth and innovation.
With operations spanning multiple continents and a strong portfolio of capsule technologies, dosage solutions, and health ingredients, CHI is positioned to continue playing an important role in supporting the pharmaceutical and nutraceutical industries.
As the transaction moves toward completion, industry observers will be watching closely to see how the newly independent company evolves and expands under its new ownership structure.
About Lone Star
Lone Star is a leading investment firm headquartered in London, UK, advising funds on investing in private equity, loans, and real estate. Since launching its first fund in 1995, Lone Star has organized 25 private equity funds managing nearly $95 billion in assets
