PPD expands number of owners

WILMINGTON, NC (WWAY) — Wilmington-based PPD has expanded its number of owners.

In a news release PPD announced that its existing owners, affiliates of Hellman & Friedman and affiliates of The Carlyle Group, have entered into definitive agreements to recapitalize PPD and expand the company’s ownership to include two new investors, a subsidiary of the Abu Dhabi Investment Authority (ADIA) and an affiliate of GIC, Singapore’s sovereign wealth fund (GIC). GIC and ADIA are longtime investors in Carlyle and Hellman & Friedman and now will be direct investors in PPD.

Hellman & Friedman and The Carlyle Group bought the company for $3.9 million in 2011 and took it private. Fred Eshelman started the company as a consulting firm in 1985. The company moved into its world headquarters in downtown Wilmington in 2007.

The potential sale of PPD has been rumored several times over the last few years.

Under the agreements, Hellman & Friedman will assume majority ownership and Carlyle will retain a substantial minority position in PPD, both investing substantial equity from new funds. Hellman & Friedman and Carlyle will maintain majority joint ownership of the company. In connection with the transaction, PPD expects to raise approximately $550 million through the issuance of new senior unsecured holdco notes. The proceeds from the investments of Hellman & Friedman, Carlyle, ADIA and GIC and the issuance of the new notes will be used to finance the recapitalization.

The transaction, based on a total enterprise value of $9.05 billion, is expected to close in the second quarter of 2017. Carlyle and Hellman & Friedman acquired PPD in December 2011 in a transaction valued at approximately $3.6 billion. PPD has delivered substantial top- and bottom-line growth since its take-private, with revenue today up more than 70 percent since 2011.

“PPD is stronger and healthier than it’s ever been since going private in late 2011 and has progressed its strategy to reduce the time and cost of drug development for our customers,” PPD CEO and Chairman David Simmons said in the release. “After evaluating all our options, the board determined a transaction led by our existing owners was in the best interest of the company and all its stakeholders. We are excited to continue our partnership with Hellman & Friedman and Carlyle and look forward to working with our new investors, GIC and ADIA. The PPD leadership team and our more than 19,000 colleagues around the world remain dedicated to our purpose and mission of improving health by helping our customers deliver life-changing therapies.”

“PPD’s performance since 2011 has been exceptional,” said Allen Thorpe, managing director of Hellman & Friedman. “We are thrilled to announce this transaction and mark the beginning of the next chapter of PPD’s success. Increasing our investment reflects our confidence in the outstanding team of people throughout the company and PPD’s leadership position in the CRO industry. PPD is making the hard work of innovating new therapies easier for thousands of researchers and doctors, and we’re proud to support its continued growth.”

Stephen H. Wise, managing director and global head of healthcare for Carlyle, added, “We are proud of PPD’s accomplishments since we made our investment in 2011. PPD has strengthened its platform immensely and today is positioned as one of the most innovative CROs in the market. This new capital structure is designed to support the strategy of the company and drive continued strong growth. Carlyle is excited to remain a significant investor in PPD and support the entire PPD employee base in this next chapter.”

The transaction still must be approved by federal regulators..