New York: Pfizer Inc said it struck a deal to sell its Capsugel unit, the world’s largest maker of hard capsules, to private equity firm KKR & Co for nearly $2.38 billion.
Pfizer, which said in October it was exploring the sale of Capsugel, said it expects to make additional share repurchases this year as a result of the deal, beyond its previous plans for $5 billion in buybacks for 2011.
The deal with KKR, announced on Monday, comes as the world’s largest drugmaker has indicated it is reviewing possible further divestitures under Ian Read, its new chief executive officer. Pfizer’s initial decision to explore options for Capsugel came a few months before Read was named CEO.
Pfizer shares rose 15 cents, or 0.7%, to $20.53 in premarket trading.
Capsugel had about $750 million in revenue last year and manufactured more than 180 billion hard capsules. In addition to hard gelatin capsules, its business includes liquid, softgel, non-animal, and fish gelatin capsules, for use in pharmaceutical products and dietary supplements.
Capsugel, whose global headquarters will remain in New Jersey, was created in the early 1960s by drugmaker Parke-Davis, which was part of Warner-Lambert when Pfizer acquired it in 2000 in a blockbuster deal.
Its customers have included Pfizer as well as outside companies in the pharmaceutical, consumer medicine and health and nutrition industries.
As a result of the sale, which is expected to be completed in the third quarter, Pfizer slightly lowered its revenue targets for this year and next year.
For 2011, it now projects revenue of $65.2 billion to $67.2 billion, down from $66 billion to $68.0 billion previously. It expects 2012 revenue of $62.2 billion to $64.7 billion, down from $63.0 billion to $65.5 billion previously. It maintained its other financial forecasts for 2011 and 2012.
Pfizer’s financial advisers on the deal were Morgan Stanley & Co and Guggenheim Securities.