WALTHAM, Mass. and WILMINGTON, N.C., April
15, 2021 /PRNewswire/ -- Thermo Fisher Scientific Inc.
(NYSE: TMO) ("Thermo Fisher"), the
world leader in serving science, and PPD, Inc. (Nasdaq: PPD)
("PPD"), a leading global provider of clinical research services to
the pharma and biotech industry, today announced that their boards
of directors have approved a definitive agreement under which
Thermo Fisher will acquire PPD for
$47.50 per share for a total cash
purchase price of $17.4 billion plus
the assumption of approximately $3.5
billion of net debt. This represents a premium of
approximately 24% to the unaffected closing price of PPD's common
stock on the Nasdaq as of Tuesday, April 13,
2021, or 32% to the 60-day VWAP inclusive of that date.
![Thermo Fisher Scientific logo Thermo Fisher Scientific logo](https://mma.prnewswire.com/media/1488648/Thermo_Fisher_Scientific_Logo.jpg)
PPD provides a broad range of clinical research and laboratory
services to enable customers to accelerate innovation and increase
drug development productivity. A leader in the growing $50 billion clinical research services industry,
PPD has more than 26,000 colleagues operating in nearly 50
countries. In 2020, the company generated revenue of $4.7 billion. Upon close of the transaction, 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 in new and exciting ways as they
move a scientific idea to an approved medicine quickly, reliably
and cost effectively," said Marc N.
Casper, chairman, president and chief executive officer,
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."
David Simmons, chairman and chief
executive officer, PPD, said, "This is a very exciting announcement
for our shareholders and will provide customers with an even better
opportunity to bring meaningful innovation to the market faster and
more efficiently. Thermo Fisher is a
world-class company with a very similar culture and values and will
provide a great foundation for our colleagues to continue to
deliver for our customers and to develop their own skills and
careers."
Casper added, "Both companies have complementary mission-driven
cultures, and I can't wait to welcome PPD's colleagues from around
the world to Thermo Fisher once the
transaction is completed."
Benefits of the Transaction
Establishes Thermo Fisher as One of the Global Leaders in the
Attractive, High Growth Clinical Research Services Industry
PPD serves a $50 billion industry
forecasted to grow long-term in the mid-single digits, driven by
scientific breakthroughs, the continued expected robust funding for
drug discovery and the need for strategic suppliers for the pharma
and biotech industry to help them bring safe and effective
medicines to the patients that need them. PPD has invested
significantly in its capabilities and is one of the leading global
players providing services to both emerging biotech customers and
to all of the top pharma companies in the world.
Combination Further Enhances Thermo Fisher's Value
Proposition for Pharma and Biotech Customers by Adding Highly
Complementary Services
Thermo Fisher is a leading
supplier to the pharma and biotech industry, supporting research
and development, clinical trials and production. PPD enhances
Thermo Fisher's offering, bringing a
proven drug development platform, excellent patient recruitment
capabilities, strong laboratory services and a complementary
reputation for excellent quality and service. These combined
capabilities further enhance Thermo
Fisher's value proposition to pharma and biotech customers
and allow them to more efficiently access these services, which are
key enablers of their success.
Creates Meaningful Benefits for Customers
In the near-term, Thermo Fisher's
access to key decision makers in pharma and biotech companies will
increase the opportunities for PPD to win additional work from
existing and new customers as the pandemic has further highlighted
the need for these customers to develop strategic relationships
with their key suppliers. The combined company's extensive
capabilities and knowledge in serving the pharma and biotech
industry will enable new solutions for customers that create the
potential to reduce the time and cost of the drug development
process.
Delivers Attractive Financial Benefits
The transaction is expected to be immediately and significantly
accretive to Thermo Fisher's
adjusted EPS, adding $1.40 in the
first 12 months after close. Thermo
Fisher expects to realize total synergies of approximately
$125 million by year three following
close, consisting of approximately $75
million of cost synergies and approximately $50 million of adjusted operating income benefit
from revenue-related synergies.
Approvals and Financing
The transaction, which is expected to be completed by the end of
2021, is subject to the satisfaction of customary closing
conditions, including the receipt of applicable regulatory
approvals.
In addition to board approval, shareholders holding in aggregate
approximately 60% of the issued and outstanding shares of common
stock of PPD have approved the transaction by written consent. No
further action by other PPD shareholders is required to approve the
transaction.
Thermo Fisher has obtained
committed bridge financing with respect to a portion of the
purchase price. To fund the transaction, Thermo Fisher intends to use proceeds from debt
financing and cash on hand.
Advisors
Barclays Capital, Inc. and Morgan Stanley & Co. LLC are
serving as financial advisors to Thermo
Fisher, and Cravath, Swaine & Moore LLP and Arnold &
Porter Kaye Scholer LLP are serving as legal counsel. For PPD, J.P.
Morgan Securities LLC is serving as exclusive financial advisor,
while Simpson, Thacher &
Bartlett LLP is serving as legal counsel.
Conference Call and Webcast
Thermo Fisher will host a
conference call and webcast at 8:30 a.m.
Eastern Time today to provide more information on this
announcement. The webcast and accompanying slides can be accessed
in the Investors section of www.thermofisher.com. An audio archive
of the call will be available in that section of the website until
April 29, 2021.
Conference Call Dial-In:
Domestic: (833)
979-2843
International: (236)
714-2942
Conference ID: 2766349
Replay Dial-In:
Dial-In: (800) 585-8367
or (416) 621-4642
Conference ID: 2766349
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. is the world leader in serving
science, with annual revenue exceeding $30 billion. Our
mission is to enable our customers to make the world healthier,
cleaner and safer. Whether our customers are accelerating life
sciences research, solving complex analytical challenges, improving
patient diagnostics and therapies or increasing productivity in
their laboratories, we are here to support them. Our global team of
more than 80,000 colleagues delivers an unrivaled combination of
innovative technologies, purchasing convenience and pharmaceutical
services through our industry-leading brands, including Thermo
Scientific, Applied Biosystems, Invitrogen, Fisher Scientific,
Unity Lab Services and Patheon. For more information, please
visit www.thermofisher.com.
About PPD
PPD is a leading global clinical research organization providing
broad, integrated drug development, laboratory and lifecycle
management services. Our customers include pharmaceutical,
biotechnology, medical device, academic and government
organizations. With offices in 47 countries and more than 26,000
professionals worldwide, PPD applies innovative technologies,
therapeutic expertise and a firm commitment to quality to help
customers bend the cost and time curve of drug development and
optimize value in delivering life-changing therapies to improve
health. For more information, visit www.ppd.com.
Additional Information and Where to Find It
This communication is being made in respect of the proposed
transaction involving Thermo Fisher Scientific and PPD, Inc. PPD
will prepare an information statement for its stockholders
containing the information with respect to the transaction
specified in Schedule 14C promulgated under the Securities Exchange
Act of 1934, as amended, and describing the proposed transaction.
When completed, a definitive information statement will be mailed
to PPD's stockholders. Investors are urged to carefully read the
information statement regarding the proposed transaction and any
other relevant documents in their entirety when they become
available because they will contain important information about the
proposed transaction. You may obtain copies of all documents filed
with the SEC regarding this transaction, free of charge, at the
SEC's website, http://www.sec.gov or from PPD's website at
www.ppd.com.
Forward-Looking Statements
This communication contains forward-looking statements that
involve a number of risks and uncertainties. Words such as
"believes," "anticipates," "plans," "expects," "seeks,"
"estimates," and similar expressions are intended to identify
forward-looking statements, but other statements that are not
historical facts may also be deemed to be forward-looking
statements. Important factors that could cause actual results to
differ materially from those indicated by forward-looking
statements include risks and uncertainties relating to: the
duration and severity of the COVID-19 pandemic; the need to develop
new products and adapt to significant technological change;
implementation of strategies for improving growth; general economic
conditions and related uncertainties; dependence on customers'
capital spending policies and government funding policies; the
effect of economic and political conditions and exchange rate
fluctuations on international operations; use and protection of
intellectual property; the effect of changes in governmental
regulations; and the effect of laws and regulations governing
government contracts, as well as the possibility that expected
benefits related to recent or pending acquisitions, including the
proposed acquisition, may not materialize as expected; the proposed
acquisition not being timely completed, if completed at all;
regulatory approvals required for the transaction not being timely
obtained, if obtained at all, or being obtained subject to
conditions; prior to the completion of the transaction, PPD's
business experiencing disruptions due to transaction-related
uncertainty or other factors making it more difficult to maintain
relationships with employees, customers, other business partners or
governmental entities; difficulty retaining key employees; the
outcome of any legal proceedings related to the proposed
acquisition; and the parties being unable to successfully implement
integration strategies or to achieve expected synergies and
operating efficiencies within the expected time-frames or at all.
Additional important factors that could cause actual results to
differ materially from those indicated by such forward-looking
statements are set forth in Thermo
Fisher's Annual Report on Form 10-K for the year ended
December 31, 2020, which is on file
with the U.S. Securities and Exchange Commission ("SEC") and
available in the "Investors" section of Thermo Fisher's website, ir.thermofisher.com,
under the heading "SEC Filings," and in any subsequent Quarterly
Reports on Form 10-Q and other documents Thermo Fisher files with the SEC, and in PPD's
Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC
and available in the "Investors" section of PPD's website,
investors.ppd.com, under the heading "SEC Filings," and its
subsequent Quarterly Reports on Form 10-Q and in other documents
PPD files with the SEC. While the Company or PPD may elect to
update forward-looking statements at some point in the future, the
Company and PPD specifically disclaim any obligation to do so, even
if estimates change and, therefore, you should not rely on these
forward-looking statements as representing either the Company's or
PPD's views as of any date subsequent to today.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), Thermo Fisher uses certain non-GAAP financial
measures, including adjusted EPS, which excludes certain
acquisition-related costs, including charges for the sale of
inventories revalued at the date of acquisition and significant
transaction costs; restructuring and other costs/income;
amortization of acquisition-related intangible assets; certain
other gains and losses that are either isolated or cannot be
expected to occur again with any regularity or predictability, tax
provisions/benefits related to the previous items, benefits from
tax credit carryforwards, the impact of significant tax audits or
events and the results of discontinued operations. Thermo Fisher excludes the above items because
they are outside of the company's normal operations and/or, in
certain cases, are difficult to forecast accurately for future
periods. Thermo Fisher believes that
the use of non-GAAP measures helps investors to gain a better
understanding of the company's core operating results and future
prospects, consistent with how management measures and forecasts
the company's performance, especially when comparing such results
to previous periods or forecasts.
1 Adjusted earnings per share is a non-GAAP measure
that excludes certain items detailed later in this press release
under the heading "Use of Non-GAAP Financial Measures."
Media Contact
Information:
Ron
O'Brien
|
Investor Contact
Information:
Rafael
Tejada
|
781-622-1242
|
781-622-1356
|
ron.obrien@thermofisher.com
|
rafael.tejada@thermofisher.com
|
www.thermofisher.com
|
|
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SOURCE Thermo Fisher Scientific