PPD agrees to go private for $3.9B in cash

AP News
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Posted: Oct 03, 2011 6:32 PM
PPD agrees to go private for $3.9B in cash

Pharmaceutical Product Development said Monday it has agreed to be taken private by The Carlyle Group and Hellman & Friedman LP for $3.9 billion in cash.

The deal values the Wilmington, N.C., company at $33.25 per share, a 30 percent premium to its Friday closing price.

Pharmaceutical Product Development Inc. provides contract drug development and discovery services for pharmaceutical, biotechnology, medical device, academic and government organizations. PPD and its competitors saw cancellations increase in recent years, and large drugmakers have become slower to start major clinical development programs as their revenue growth stalled.

The company's board has unanimously approved the sale. Pending approval by regulators and shareholders, PPD expects the sale to close during the fourth quarter. The agreement gives PPD 30 days to seek offers from other firms, which Carlyle and Hellman & Friedman would have an opportunity to match.

Shares of PPD rose $6.62, or 26 percent, to close at $32.28.

The company has more than 11,000 employees in 44 countries. In June, PPD spun off Furiex Pharmaceuticals, which partners with drug companies to speed up clinical development programs.

Reports in July said PPD was considering a sale. The company said it was not talking to competitors, but said its board had asked management to review its strategy and structure. In August the company was reported to be talks with Carlyle Group, and had also had talks with Hellman & Friedman and other private equity firms. Its shares jumped 18 percent on Aug. 15 and set an annual high of $33.07 the following day. However the stock has given up those gains in the last seven weeks as the markets have slumped, declining 18.5 percent to close at $25.66 on Friday.