Thermo Fisher to acquire CRO giant PPD for $17.4 billion

April 15, 2021

Deal gives leader in lab instruments and tests a big push into pharma service and clinical research space

Medical device maker Thermo Fisher Scientific Inc., the world's largest manufacturer of scientific instruments, announced a definitive agreement to acquire contract research organization (CRO) PPD for a total cash purchase price of $17.4 billion.

PPD provides a variety of clinical research and laboratory services to support pharma sponsors in increasing drug development productivity. The Waltham, Mass.-based company has more than 26,000 colleagues operating in nearly 50 countries.

In 2020, 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.

“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 as they move a scientific idea to an approved medicine quickly, reliably and cost effectively,” said Marc N. Casper, chairman, president and CEO, Thermo Fisher Scientific. “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.”

Thermo Fisher will acquire PPD for $47.50 per share. This represents a premium of about 24% to the unaffected closing price of PPD's common stock on the Nasdaq as of April 13, or 32% to the 60-day VWAP inclusive of that date.

With Covid-19 sparking new development efforts around drugs and vaccines to fight the virus, along with continued pursuits for new therapies to treat cancer and other diseases, the clinical research services field is a growing market, reportedly valued at around $50 billion currently.