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Mitsubishi Chemical To Buy Capsule Maker Qualicaps From Carlyle For $654.9 Mln

Japan's Mitsubishi Chemical Holdings Corp. (MTLHF) said Tuesday that it has agreed to buy Qualicaps Co. Ltd., a Japan-based maker of pharmaceutical capsules, from private equity firm Carlyle Group for 55.8 billion yen or $654.9 million. The acquisition price includes debt.

Qualicaps makes capsules for pharmaceutical as well as health and nutrition products. Its products include hard gelatin capsules, non-gelatin hypromellose capsules and pharmaceutical processing equipment. The company has operations in Japan, the U.S. and Europe, with overseas sales accounting for 64 percent of consolidated revenue in 2011.

Formed in 1965, Qualicaps was acquired by Carlyle Group in 2005. For fiscal year 2011, the company recorded operating income of 3 billion yen and sales of 17.6 billion yen.

The global capsule market has an estimated market size of about 100 billion yen. Mitsubishi Chemical noted that Qualicaps has a market share of more than 20 percent in the pharma-grade capsules segment, which accounts for the majority of the total capsule market.

Mitsubishi Chemical noted that Qualicaps' global customer base was highly complementary to its own existing healthcare solutions and API businesses. The company expects its proprietary technology platform and expertise, combined with Qualicaps' in-house capsule manufacturing know-how, to enable to provide higher value-added capsule products to pharmaceutical customers.

Mitsubishi Chemical expects the transaction to close in March 2013. Further, the company expects to incur goodwill as a result of the deal, but has not yet determined the amount.

Qualicaps will become a consolidated subsidiary of Mitsubishi Chemical upon closing, but it will not materially impact the company's consolidated financial results for the fiscal year ending March 2013.

Mitsubishi Chemical has been downsizing its sluggish domestic commodity-grade petrochemical business and focusing on efforts to bolster its drug-related business.

MTLHF last traded on Thursday, December 20, at $24.34 on a volume of 600 shares.

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by RTT Staff Writer

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