Thermo Fisher acquires PPD in $17.4 billion cash deal

The world’s largest scientific instruments maker pursues speed in getting medicines to market with this transaction.

On Thursday, the medical device maker Thermo Fisher Scientific announced it would be acquiring contract research organization PPD for $17.4 billion as it looks to expand its offerings. Per reports, the world's largest maker of scientific instruments will pay $47.50 a share for PPD – representing a premium of 24% above the CRO’s $38.36 closing price on Tuesday before reports of a possible deal emerged. With the deal entirely cash funded, Thermo Fisher will also assume about $3.5 billion of PPD’s net debt. According to its CEO Marc Casper, the transaction is “all about speed” in getting medicines to market and comes at a time when the pharma/biotech end market is the company’s largest and fastest growing.

In recent years, Thermo Fisher has doubled down on boosting its pharma service business through which it provides raw material for new treatments and clinical trial services with acquisitions of Dutch drug manufacturers, Patheon and Brammer Bio. PPD, which went public a year ago recently reported a bumper quarter with 30% jump in year-on-year revenue. While CROs were initially hurt by the onset of the coronavirus pandemic, they have since enjoyed a resurgence as significant investments flowed into the development of vaccines to combat the health crisis which has crippled much of the world. PPD has been one of the notable beneficiaries, having secured work from Moderna Inc. to support the development of its vaccine.