Pharmaceutical Product Development announced that its existing owners, affiliates of Hellman & Friedman and affiliates of The Carlyle Group, 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 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. The transaction values PPD at more than $9 billion
Under the agreements, Hellman & Friedman will assume majority ownership and Carlyle will retain a substantial minority position in PPD, both investing 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 holding company 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 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,” David Simmons, chairman and CEO of PPD said. “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.”