PHARMA COMPANY, PPD, TO BE ACQUIRED
03 Oct, 2011
PPD to be acquired by the Carlyle Group and Hellman & Friedman
Skadden is representing Pharmaceutical Product Development, Inc. (PPD) in its $3.9 billion acquisition by The Carlyle Group and Hellman & Friedman, announced today (Oct 3). PPD is a leading global contract research organization providing drug discovery, development and lifecycle management services
Under the terms of the merger agreement, Carlyle and Hellman & Friedman will acquire the outstanding common shares of PPD for $33.25 per share in cash. This represents a premium of 29.6 percent over PPD’s closing price on September 30, 2011.
PPD’s board of directors has unanimously approved the merger agreement and recommended that PPD’s shareholders adopt the agreement. A special meeting of PPD’s shareholders will be held following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission and subsequent mailing of the proxy statement to shareholders.
“The sale of PPD to The Carlyle Group and Hellman & Friedman 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 as the company builds on its 25-year history of success,” said Fred Eshelman, founder and executive chairman of PPD.
Karen H. Bechtel, managing director and head of the healthcare group at Carlyle, said, “Fred Eshelman and PPD’s management team have built a leading and extremely high quality global research and services organization that will continue to help pharmaceutical and biotech companies develop new drugs at lower costs. We look forward to helping expand and enhance PPD’s platform and broad spectrum of therapeutic expertise.”
Allen Thorpe, managing director of Hellman & Friedman added, “PPD has an outstanding global CRO franchise, and we are delighted to partner with its highly talented and capable employees around the world. They are well known for unwavering commitment to their clients, and we look forward to supporting that commitment to bring the broadest and deepest set of capabilities to PPD’s clients. We look forward to the company’s continued growth and expansion under our ownership.”
Closing of the transaction is subject to certain conditions, including the approval of PPD’s shareholders, regulatory approvals and the satisfaction of other customary closing conditions, but is not subject to any financing condition. The transaction has fully committed financing, consisting of a combination of equity provided by Carlyle Partners V, L.P., a $13.7 billion U.S. investment fund, and Hellman & Friedman Capital Partners VII, L.P., an $8.9 billion fund, and external debt financing commitments provided by Credit Suisse, JP Morgan, Goldman Sachs and UBS.
Under the terms of the merger agreement, PPD may solicit acquisition proposals from third parties for a period of 30 calendar days from the date of the merger agreement and may at any time respond to unsolicited proposals that the board determines are reasonably likely to result in a superior proposal. The merger agreement provides Carlyle and Hellman & Friedman a customary right to match a superior proposal. There can be no assurance that this process will result in a superior proposal.
The transaction is currently expected to close in the fourth quarter of 2011. Following completion of the transaction, PPD will become a privately held company and its stock will no longer trade on Nasdaq. PPD noted that, in light of the proposed transaction, it will not host a conference call to discuss financial results for the third quarter of 2011.
Morgan Stanley & Co. LLC is financial advisor, and Lazard provided a fairness opinion to the board of directors of PPD in connection with the transaction. Wyrick Robbins Yates & Ponton LLP and Skadden, Arps, Slate, Meagher & Flom LLP are legal advisors to PPD in connection with the transaction. Latham & Watkins LLP, Simpson Thacher & Bartlett LLP and Covington & Burling LLP are legal counsel, and Credit Suisse is financial advisor, to Carlyle and Hellman & Friedman in connection with the transaction.