There's more M&A activity percolating in the fast-changing CRO business. The Wall Street Journal cites sources saying that PPD--with a $3.2 billion market cap--is sizing up a possible sale of the company. That move puts PPD up on the sales block with PRA, which could fetch more than a billion dollars for its private equity owner Genstar.
In a followup, Reuters reported this morning that PPD--which primarily provides late-stage research support--could spur bids of more than $4 billion, according to analysts, with offers of up to $35 a share. That news helped drive a spike in PPD's share price.
Over the past couple of years the CRO business has undergone some major changes as Big Pharma turned to strategic partnerships with top firms to help them outsource more trial work. With CROs scrambling to do deals as the overall R&D pie has shrunk, the industry has also undergone a shakeout as the companies consolidate operations. Analysts expect the big CROs that dominate the business will control nearly half the market by 2015, giving private equity players like Genstar--which bought PRA for $700 million--an opportunity to capitalize on the buyout trend.
PPD has more than 11,000 staffers scattered around the globe in a business that brought in close to $1.5 billion in revenue last year. The company, whioch is based in Wilmington, NC, offers a global structure for drug development work.
Just days ago INC announced that it had closed a deal to buy Kendle for $232 million.
- here's the story from the Wall Street Journal
- here's the report from Reuters