The Carlyle Group Agrees to Acquire Shionogi Qualicaps Group from Shionogi

Tokyo, Japan - Global private equity firm The Carlyle Group today announced that it has agreed to acquire from Shionogi & Co., Ltd. 100 percent of the outstanding shares of four Shionogi subsidiaries—Shionogi Qualicaps Co., Ltd., Shionogi Qualicaps, Inc., Shionogi Qualicaps, S.A., and Shionogi Europe B.V. ("Shionogi Qualicaps Group")—through a management buyout (MBO). In this agreement, the current management will remain in place and all employees will be retained. The transaction is expected to be completed in October 2005. Financial terms were not disclosed.

The Shionogi Qualicaps Group, entirely held by Shionogi directly or indirectly, manufactures and markets hard capsules in the pharmaceutical and nutritional markets. It has three entities for production and sales – Japan, the U.S. and Spain. With expertise in technology and marketing, the Shionogi Qualicaps Group is the industry leader in Japan taking more than 60 percent share in the pharmaceutical hard capsules market, and is the second largest in the global market including the U.S. and Europe.

Tamotsu Adachi, Carlyle Managing Director and Head of the Japan Team, said, "The Shionogi Qualicaps Group is the pre-eminent global manufacturer of hard capsules. After more than 40 years, it has achieved high recognition from countless customers—including leading global pharmaceutical companies—thanks to the quality of its products and global manufacturing and distribution capabilities across Japan, United States and Europe."

"Because hard capsule is an indispensable part of the drug affecting its efficacy, there will be an ever growing need for stable supply of high quality, safe products. Steady market growth is also expected for hard capsules in the health and nutrition sector. At the same time, as the pharmaceutical industry becomes increasingly global, it is critical for the hard capsule business to strengthen its manufacturing and marketing capabilities accordingly."

"The healthcare industry is an area Carlyle has expertise through a number of investments worldwide. By leveraging our know-how and experience, we can support the global management of the Shionogi Qualicaps Group and achieve further growth."

"This transaction is the first case where a major Japanese pharmaceutical company will spin off its business to a private equity fund."

# # #