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PPD Explores Sale, According To Wall Street Journal

By Staff Reports, posted Jul 18, 2011

Wilmington-based PPD Inc. is looking at potentially selling the company, according to an article published Sunday on the Wall Street Journal web site.

Potential bidders include private equity firms and larger clinical-research companies, the article noted, but also cautioned “PPD could still change its plans.”

PPD spokesman Ned Glascock declined to comment today on the report.
“PPD does not provide comment on rumors or speculation,” Glascock said.

Shares of PPD jumped more than 16 percent on the news Monday morning to $32.55.

Jim Kumpel, an analyst with BB&T Capital Markets, said the clinical-research industry has seen a lot of merger and acquisition activity in the past year, but he doesn’t see PPD as a likely acquisition target among its competitors.

“PPD is operating with pretty healthy margins,” Kumpel said. “The surprise here is there are not a lot of logical, bigger companies who would look to take them out.”

If PPD was sold, the buyer would more likely be a private equity firm, Kumpel said.

Still, Kumpel expressed some skepticism that a private equity firm would look to purchase PPD as opposed to another firm in the industry.

Private equity firms generally look to acquire struggling companies at low sale prices where they can make relatively quick operational improvements and boost the bottom line.

“They haven’t had any major operational issues,” Kumpel said. “There’s less in the way of low-hanging fruit as some other targets out there.”

Founded by Fred Eshelman as a one-person consulting firm in 1985, PPD has grown into a public corporation with more than 11,000 employees and offices in 44 countries.

The company has 1,500 employees in Wilmington, making it the region’s seventh largest employer, according to the Business Journal’s 2011 Book of Lists.

Here is the link to the Wall Street Journal article, but a subscription may be required to see the full story:



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