On Thursday, Thermo Fisher Scientific Inc., a medical device maker said that it would acquire contract researcher PPD Inc. at $17.4 billion. Thermo looks to add more muscle to its pharmaceutical services business. It is the world’s largest maker of scientific instruments. It will pay $47.50 per share – a premium of 24% above the $38.36 closing price on Tuesday, which was before the news was reported.
Almost $1.40 is expected to be added to Thermo Fisher adjusted earnings per share after the PPD deal. This will be seen in the first year after the deal is closed which is expected by the end of the year. PPD went public last year and has been helping companies in the development process of drugs through preclinical consulting, designing, and conducting clinical trials.
Moderna Inc. (MRNA.O) hired it to oversee the Covid-19 trial sites. The deal would also help PPD win more work as the Covid-19 pandemic has surged the need for key supplies and drugmakers. Thermo Fisher is already a supplier of drug ingredients to many of the biotech and pharma industries.
Thermo’s Chief Executive Officer, Marc Casper, told Reuters, “There is an enormous backlog within PPD’s book of business on all of those normal trials that are coming back online that somehow were affected by the pandemic.”