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United States : PPD to Recapitalize with Existing Owners and Investors.

Pharmaceutical Product Development, LLC (PPD) today announced that its existing owners, affiliates of Hellman & Friedman and affiliates of The Carlyle Group (Carlyle), have entered into definitive agreements to recapitalize PPD and expand the companys ownership to include two new investors, a subsidiary of the Abu Dhabi Investment Authority (ADIA) and an affiliate of GIC, Singapores sovereign wealth fund (GIC). GIC and ADIA are longtime investors in Carlyle and Hellman & Friedman and now will be direct investors in PPD.

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 its 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, said David Simmons, chairman and CEO of PPD. 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. PPDs 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 PPDs success. Increasing our investment reflects our confidence in the outstanding team of people throughout the company and PPDs 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 PPDs 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.

Closing of the transaction is subject to customary conditions, including regulatory approval in the United States. This news release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sales of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Goldman Sachs, J.P. Morgan Securities LLC, and Centerview Partners acted as financial advisors to PPD. Latham & Watkins LLP and Simpson Thacher & Bartlett LLP acted as legal advisors to PPD.

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Publication:Mena Report
Date:Apr 27, 2017
Words:625
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