Pfizer has agreed to sell its Capsugel drug delivery business to the investment firm Kohlberg Kravis Roberts & Co. for $2.38 billion in cash. Although Pfizer previously said it intended to sell the business, the deal itself comes on the heels of recent reports that the drug giant might shed almost all of its nonpharmaceutical operations and dramatically shrink its $67 billion-per-year revenue base (C&EN, March 21, page 22). Capsugel, which manufactures hard capsules and other drug delivery systems, had sales of about $750 million in 2010. Its customers are in the prescription pharmaceutical, over-the-counter drug, health, and nutrition industries. “The transaction is an endorsement of Capsugel’s consistent success to date and its potential for future growth with KKR,” says Capsugel President Guido Driesen, who will continue to lead the business. All Pfizer employees connected with Capsugel will remain with the business, which will keep its corporate headquarters in Peapack, N.J. The transaction is expected to be completed in the third quarter. Pfizer plans to use any proceeds to purchase its own stock on the open market and also look for investment and business development opportunities.