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PPD Exec Mum On Report Of Sale Discussions

By Alison Lee Satake, posted Aug 16, 2011

PPD executive chairman Fred Eshelman declined to comment today on reports that the company has been in talks with private equity firm The Carlyle Group for a possible sale of the Wlmington-based contract research organization.

On Monday, Bloomberg Businessweek reported that PPD was in exclusive discussions with The Carlyle Group about a potential sale.

That report came after Eshelman recently issued a statement that the company was evaluating long-term plans and capital structure in order to see “if there are any actions which might create value at this time” after the Wall Street Journal first reported that the company might be up for sale.

Today, the company’s stock was trading at $32.29 a share on the Nasdaq.

“We value PPD at $35 per share on a stand-alone basis and believe the company could fetch an even higher price after factoring in potential synergies and an acquisition premium,” said Lauren Migliore, an equity analyst at investment research firm Morningstar, Inc.

The firm has thought that the market was undervaluing PPD’s potential for a long time, she said.

As for the impetus for PPD to possibly go private now, a desire to avoid some government regulations may be a factor, according to a local expert.

“It’s like some of the big players are likely frustrated by the regulatory and accounting requirements attached to public firms,” said Ed Graham, UNCW professor of economics and finance.

The Carlyle Group, based in Washington, D.C., manages about $153 billion of assets worldwide. Its investments include corporate equity, real assets, global market strategies and fund of fund solutions.

According to its website, Carlyle “focuses on sectors in which it has demonstrated expertise: aerospace, defense & government services, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, real estate, technology & business services, telecommunications & media and transportation.”

It boasts more than 1,400 investors from 75 countries and has committed more than $4 billion of its own capital to its funds.


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