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Carlyle, Hellman & Friedman take PPD private

by Lou Whiteman  |  Published October 3, 2011 at 11:46 AM
Drug research company Pharmaceutical Product Development Inc. agreed Monday, Oct. 3, to be taken private by Carlyle Group and Hellman & Friedman LLC for $3.9 billion in cash.

Terms of the deal call for holders of PPD to receive $33.25 per share in cash, a premium of 29.6% over the target's Friday close. The agreement gives PPD 30 days to solicit third-party offers and grants Carlyle and Hellman the right to match any superior proposal that surfaces. PPD has been exploring options since at least July.

Wilmington, N.C.-based PPD provides contract research services to pharmaceutical, biotech, medical device and academic customers, with offices in 44 countries and more than 11,000 employees. The company in the 12 months ending June 30 generated Ebitda of $293.95 million on sales of $1.54 billion.

Company founder and executive chairman Fred Eshelman in a statement said the deal "provides an attractive return for our shareholders while also ensuring a secure foundation and commitment to investment, innovation and excellence for PPD clients and employees."

The deal is subject to PPD shareholder approval and regulatory clearance but has no financing condition. The buyers said they will fund the purchase via equity and from external debt financing commitments provided by Credit Suisse Group, J.P. Morgan Chase & Co., Goldman, Sachs & Co. and UBS.

Private equity firms have been buying up healthcare assets in recent months, with an Apax Partners LLP-led consortium in July acquiring medical device maker Kinetic Concepts Inc. for $6.3 billion, and TPG Capital spending $1.97 billion to buy Immucor Inc.

Morgan Stanley provided financial advice to PPD, with Lazard offering a fairness opinion to the company's board and Wyrick Robbins Yates & Ponton LLP and Skadden, Arps, Slate, Meagher & Flom LLP's Ann Beth Stebbins and Edward Welch providing legal advice. The buyers received financial advice from Credit Suisse and legal counsel from Latham & Watkins LLP, Simpson Thacher & Bartlett LLP and Covington & Burling LLP.
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Tags: Carlyle Group | Credit Suisse Group | Goldman | Hellman & Friedman LLC | Immucor Inc. | J.P. Morgan Chase & Co. | Kinetic Concepts Inc. | Pharmaceutical Product Development Inc. | Sachs & Co. | UBS

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