Bulletin: Lonza's Large Debt-Financed Manufacturing Site Acquisition Will Temporarily Increase Leverage

This report does not constitute a rating action. PARIS (S&P Global Ratings) March 25, 2024— Lonza Group, Switzerland-based contract and development manufacturing organization (CDMO), announced it would acquire a large biologics manufacturing site in Vacaville (U.S.) from Roche, for around Swiss franc (CHF)1.1 billion with closing expected in the second half of 2024. This acquisition will bring higher top-line growth in 2025, with a medium-term net sales guidance towards 12%-15% annual growth on average in 2024-2028 (from 11%-13% previously), while we expect the group to gradually ramp-up this newly acquired asset, resulting in S&P Global Ratings adjusted EBITDA margin around 29%. We expect this transaction will temporarily increase our S&P Global Ratings-adjusted debt to EBITDA leverage to around 2.7x in

...March 25, 2024 This report does not constitute a rating action. PARIS (S&P Global Ratings) March 25, 2024-- Lonza Group, Switzerland-based contract and development manufacturing organization (CDMO), announced it would acquire a large biologics manufacturing site in Vacaville (U.S.) from Roche, for around Swiss franc (CHF)1.1 billion with closing expected in the second half of 2024. This acquisition will bring higher top-line growth in 2025, with a medium-term net sales guidance towards 12%-15% annual growth on average in 2024-2028 (from 11%-13% previously), while we expect the group to gradually ramp-up this newly acquired asset, resulting in S&P Global Ratings adjusted EBITDA margin around 29%. We expect this transaction will temporarily increase our S&P Global Ratings-adjusted debt to EBITDA leverage to around 2.7x in 2024, before deleveraging around 2.5x in 2025. Our '###+' rating and stable outlook on Lonza are unaffected, because we believe this acquisition is part of the group's strategy...

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