Thermo Fisher to buy PPD for $17B

Thermo Fisher Scientific (NYSE:TMO) announced today that it agreed to acquire PPD (NSDQ:PPD) for $17.4 billion.

The boards of directors for both companies approved the definitive agreement which will see Thermo Fisher buy PPD at a price of $47.50 per share, totaling the $17.4 billion, plus the assumption of approximately $3.5 billion of net debt, according to a news release. That represents a premium of approximately 24% to the unaffected closing price of PPD’s common stock as of Tuesday, April 13, 2021.

Wilmington, N.C.-based PPD offers clinical research and laboratory services to enable customers to accelerate innovation and increase drug development productivity. The company has more than 26,000 colleagues operating across 50 countries and it produced revenue of $4.7 billion in 2020. It will become a part of Thermo Fisher’s laboratory products and services business segment.

Waltham, Mass.-based Thermo Fisher expects the transaction to be immediately and significantly accretive to its adjusted EPS, adding $1.40 in the first 12 months after close.

The company anticipates total synergies of approximately $125 million by the third year after the deal closes, including approximately $75 milion in cost synergies and approximately $50 million in adjusted operating income benefit from revenue-related synergies. The deal is expected to be completed by the end of 2021.

“Pharma and Biotech is our largest and fastest growing end market, and our customers value us as a strategic partner and an industry leader. The acquisition of PPD is a natural extension for Thermo Fisher and will enable us to provide these customers with important clinical research services and partner with them in new and exciting ways as they move a scientific idea to an approved medicine quickly, reliably and cost-effectively,” said Thermo Fisher president & CEO Marc N. Casper said in the release. “Longer term, we plan to continue to invest in and connect the capabilities across the combined company to further help our customers accelerate innovation and drive productivity, while driving further value for our shareholders.”

“This is a very exciting announcement for our shareholders and will provide customers with an even better opportunity to bring meaningful innovation to the market faster and more efficiently,” added PPD chairman & CEO David Simmons. “Thermo Fisher is a world-class company with a very similar culture and values and will provide a great foundation for our colleagues to continue to deliver for our customers and to develop their own skills and careers.”