Thermo Fisher Scientific (TMO) Buying PPD In $17.4 Billion Deal

By Amit Chowdhry ● April 15, 2021
  • Thermo Fisher Scientific Inc. (NYSE: TMO) and PPD, Inc. (Nasdaq: PPD) announced their board of directors approved an agreement under which Thermo Fisher will acquire PPD for a total cash purchase of $17.4 billion. These are the details.

Thermo Fisher Scientific Inc. (NYSE: TMO) and PPD, Inc. (Nasdaq: PPD) announced that their boards of directors have approved a definitive agreement under which Thermo Fisher will acquire PPD for $47.50 per share for a total cash purchase price of $17.4 billion-plus the assumption of approximately $3.5 billion of net debt. And this represents a premium of approximately 24% to the unaffected closing price of PPD’s common stock on the Nasdaq as of Tuesday, April 13, 2021 – or 32% to the 60-day VWAP inclusive of that date.

PPD is known for offering a broad range of clinical research and laboratory services to enable customers to accelerate innovation and increase drug development productivity. As a leader in the growing $50 billion clinical research services industry, PPD over 26,000 employees operating in nearly 50 countries. And last year, PPD generated revenue of $4.7 billion. Upon closing of the deal, PPD will become part of Thermo Fisher’s Laboratory Products and Services Segment.

The deal is expected to be immediately and significantly accretive to Thermo Fisher’s adjusted EPS, adding $1.40 in the first 12 months after close. And Thermo Fisher expects to realize total synergies of approximately $125 million by year three following close, consisting of approximately $75 million of cost synergies and approximately $50 million of adjusted operating income benefit from revenue-related synergies.

The deal – which is expected to be completed by the end of 2021 – is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory Along with board approval, shareholders holding in aggregate approximately 60% of the issued and outstanding shares of common stock of PPD have approved the transaction by written consent. And no further action by other PPD shareholders is required to approve the transaction.

Thermo Fisher had obtained committed bridge financing with respect to a portion of the purchase price. And to fund the transaction, Thermo Fisher intends to use proceeds from debt financing and cash on hand.

KEY QUOTES:

“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. 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.”

“Both companies have complementary mission-driven cultures, and I can’t wait to welcome PPD’s colleagues from around the world to Thermo Fisher once the transaction is completed.”

— Marc N. Casper, chairman, president and chief executive officer, Thermo Fisher Scientific

“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. 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.”

— David Simmons, chairman and chief executive officer, PPD