Bain, Cinven Near Deal for $4.4 Billion Lonza Ingredients Unit

Bain Capital and Cinven agreed to acquire Lonza Group AG’s specialty ingredients unit, bringing to a close one of the most hotly contested sales in European chemicals.

The deal is worth 4.2 billion Swiss francs ($4.7 billion), including debt, according to a statement Monday, confirming a Bloomberg News report. The transaction, scheduled to close in the second half of 2021, will refocus Lonza as a pure-play partner to the health-care industry, and the cash flow from the sale will accelerate its strategic priorities, the company said.

“Today’s announcement is the result of a comprehensive and robust selection process,” Lonza Chairman Albert M. Baehny said in a statement. “Bain Capital and Cinven have shown they understand the value of the experience and expertise of our specialty ingredients employees. They presented the most compelling industrial strategy and vision for the business.”

Shares of Lonza have risen 40% in Zurich trading over the last 12 months, giving the company a market value of about 42 billion francs. The stock rose 0.84% to 575.20 francs at 9:33 a.m. in Zurich on Tuesday.

The Lonza business manufactures chemicals for use in everything from paints to crop protection. Its microbial control solutions are also used in professional cleaning products and sanitizers, which have attracted strong demand amid the coronavirus pandemic. It operates across 17 manufacturing sites around the world and has about 2,800 permanent employees, according to the statement.

A host of private equity firms had been pursuing the unit, including Lone Star Funds, Partners Group Holding AG and Carlyle Group Inc., Bloomberg News previously reported. There had also been interest from buyout firm Advent International, German chemicals group Lanxess AG and Malaysian state oil producer Petronas.

Bank of America Corp. and UBS Group AG advised Lonza on the sale. Bain Capital and Cinven were advised by Piper Sandler and Opus Corporate Finance and Trumont.

©2021 Bloomberg L.P.

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