Thermo Fisher Nears Deal to Buy PE-backed PPD for Over $15 Billion

Thermo Fisher Scientific Inc. is nearing a deal to buy pharmaceutical-testing company PPD Inc. for more than $15 billion, according to people familiar with the matter, in what would be the latest tie-up among companies that run clinical trials and provide other services for drugmakers. Carlyle currently owns 60 percent of PPD and Hellman & Friedman owns 40 percent, with the two sharing governance rights.

The companies could finalize a deal as soon as this week, assuming the talks don’t fall apart, the people said. PPD has a market value of about $13.6 billion, while Thermo Fisher’s is $187 billion.

PPD, based in Wilmington, N.C., is a so-called contract-research organization, a type of company that runs the studies testing experimental drugs developed by pharmaceutical companies. PPD also provides laboratory services.

The contract-research industry has expanded in recent years as drugmakers pour money into developing new cancer and other treatments. While CROs, as the firms are known, were hurt as pharmaceutical trials were disrupted in the early days of the pandemic, activity has been returning, augmented by drugmaker- and government-funded studies testing Covid-19 drugs and vaccines. The industry is poised to benefit further from a heightened interest in treatments and preventive measures for any future pandemics.

PPD reported $4.7 billion in revenue last year, up 16%. Its net income tripled to just over $160 million.