US Carlyle Sells Capsule Maker to Mitsubishi Chemical

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Japan's Mitsubishi Chemical will acquire Qualicaps from U.S.-based Carlyle Group, a person familiar with the matter said on Tuesday, rewarding the buyout firm's second attempt to sell the drug capsule maker.

The deal could be announced in Japan as early as Tuesday, the person said on condition of anonymity because the details of the transaction are confidential. Carlyle declined to comment and Mitsubishi Chemical did not respond to a request for comment.

Nara, Japan-based Qualicaps makes hard two-piece capsules and related manufacturing equipment used in the pharmaceutical and dietary supplement industries. It was acquired by Carlyle in 2005 from Shionogi & Co.

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Washington, D.C.-based Carlyle appointed GCA Savvian and UBS as financial advisers for the sale of Qualicaps, Reuters Loan Pricing Corporation (RLPC) reported on Sept. 26, citing banking sources.

Carlyle first tapped UBS at the end of 2010 to sell Qualicaps but failed to attract bidders as this coincided with the $2.38 billion sale of Pfizer's Capsugel, a US-based capsule maker significantly larger than Qualicaps, according to RLPC.

The sale to Mitsubishi Chemical would value Qualicaps at about 50 billion yen ($589.7 million), including debt, the Nikkei business daily reported on Monday. The transaction is likely to be completed by next spring, Nikkei said.

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Mitsubishi Chemical, which has been downsizing its sluggish domestic commodity-grade petrochemicals business and focusing on drug-related operations, plans to tap Qualicaps' capsule technologies to beef up its drug business centered around subsidiary Mitsubishi Tanabe Pharma, Nikkei added.