NEW YORK (AP) -- Pfizer Inc. said Monday it will sell its Capsugel capsule-making business to private equity firm Kohlberg Kravis Robert & Co. for $2.38 billion in cash.
In October, Pfizer said it would review options for Capsugel and might sell the company. Pfizer said it will use the proceeds of the sale to buy back additional stock and may use some of the funds to make other investments or deals.
Pfizer said it expects the deal to close during the third quarter, assuming regulators in the U.S., European Union, and other markets approve. The New York drugmaker said Capsugel had about $750 million in revenue in 2010, and it cut its 2011 and 2012 revenue forecasts to reflect the sale.
Pfizer said it now expects $65.2 billion to $67.2 billion in revenue in 2011, lowered from $66 billion to $68 billion. The company cut its 2012 revenue forecast to a range of $62.2 billion to $64.7 billion, from $63 billion to $65.5 billion.
Analysts expected Pfizer to report $67.15 billion in revenue this year and $63.38 billion in 2012, according to estimates compiled by FactSet.
Pfizer planned to buy back $5 billion in stock in 2011, not including additional repurchases funded by the Capsugel sale.
Capsugel, based in New Jersey, made 180 billion hard capsules in 2010. Pfizer said Capsugel's corporate headquarters will remain in New Jersey after the sale to KKR, which is based in New York. The business has about 2,800 employees around the world.
Shares of Pfizer rose 15 cents to $20.53 in premarket trading.