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Exclusive: Capsugel prepares to explore sale or IPO - sources

(Reuters) - Capsugel, a U.S. maker of capsule products and other drug delivery systems, is preparing to explore a sale or initial public offering that could value it at more than $5 billion including debt, according to people familiar with the matter.

Several companies have reached out to Capsugel in recent weeks to express interest in an acquisition, including 3M Co MMM.N, Danaher Corporation DHR.N, Becton-Dickinson & Co BDX.N, Thermo Fisher Scientific Inc TMO.N, Bayer AG BAYGn.DE and Catalent Inc CTLT.N, the people said this week.

As a result, Capsugel's owner, private equity firm KKR & Co LP KKR.N, is preparing to run a sale process for the company later this year, and also explore the possibility of an IPO as an alternative to an outright sale, the people said.

Capsugel is expected to have earnings before interest, taxes, depreciation and amortization (EBITDA) this year of close to $400 million, one of the people added.

The sources asked not to be identified because the sale process is confidential. KKR and 3M declined to comment, while representatives of Capsugel, Danaher, Becton-Dickinson, Thermo Fisher, Bayer and Catalent did not respond to requests for comment.

Based in Morristown, New Jersey, Capsugel manufacturers empty two-piece hard capsules as well as finished dosage forms for drug delivery. It serves more than 4,000 corporate customers in over 100 countries.

KKR acquired Capsugel from Pfizer Inc PFE.N for $2.4 billion in 2011. Capsugel had just $200 million in annual EBITDA at the time, but under KKR it grew rapidly as it won clients in the pharmaceutical and dietary supplement industries in need of hard capsules.

A successful sale of Capsugel this year would represent the second major sale of company by KKR’s industrials team in as many years. Last year, KKR sold Capital Safety, a maker of harnesses and safety equipment, to 3M for $2.5 billion including debt.

Reporting by Carl O’Donnell and Greg Roumeliotis in New York; Editing by Matthew Lewis

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