Thermo Fisher Scientific has announced it will acquire PPD at an enterprise value of $20.9 billion and an equity value of $17.4 billion. The price represents a 24% premium to where PPD shares were trading at prior to rumors of the deal leaking earlier in the week.
PPD is a clinical research organization providing broad, integrated drug development, laboratory and lifecycle management services which generated $4.7 billion in revenue in 2020.
The acquisition shows that Thermo Fisher is trying to capitalize on the rapidly-growing pharma and biotech industries. Following the completion of the deal, PPD will be integrated into Thermo Fisher's Laboratory Products and Services Segment.
Adding PPD is expected to bring significant synergies and add $1.40 in EPS to Thermo Fisher by the first 12 months after closing. However, the regulatory process could be difficult, as both EU and U.S. regulators have expressed a reluctance to allow further large mergers in the pharma industry.