Pharmaceutical research firm PPD explores sale, IPO

Print 15 December 2015
Carl O'Donnell and Olivia Oran / Reuters

Contract research organization Pharmaceutical Product Development LLC (PPD) is exploring a sale or initial public offering that could value it at between $7 billion and $8 billion, including debt, people familiar with the matter said.

A deal would underscore how the contract research organization industry has benefited in recent years from the pharmaceutical companies’ drive to cut costs, reduce clinical trial times and expand their research and development presence around the world.

PPD's private equity owners, Carlyle Group LP and Hellman & Friedman LLC, have reached out to investment banks about appointing financial advisers to PPD, the people said on Friday.

PPD will run an auction to sell itself early next year, but will pursue an initial public offering instead if the acquisition offers it receives do not meet its owners' valuation expectations, the people added.

The sources asked not to be identified because the deliberations are confidential. Carlyle and Hellman & Friedman declined to comment, while PPD did not respond immediately to a request for comment.

A sale or IPO of PPD would come as dealmaking activity in the contract research organization sector is picking up steam. Earlier this year, Laboratory Corporation of America Holdings acquired Covance for $6.1 billion, while WuXi PharmaTech was taken private for $3.3 billion.

Based in Wilmington, North Carolina, PPD offers its services to biotech, pharmaceutical and medical device companies that wish to outsource research services. It focuses its research on a wide range of therapeutic areas, ranging from cardiovascular to urology.

Carlyle and Hellman & Friedman took the company private in 2011 for $3.9 billion.

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