The acquisition of Wilmington-based PPD Inc. could go two ways for the company's base in Wilmington, said Adam Jones, an economist with the University of North Carolina Wilmington.
"It could be a threat to the location as headquarters operations get rolled into a larger organization (potentially elsewhere), or it could mean more resources for the organization to grow," Jones said Monday.
The company's decades-long presence overall in Wilmington has been economically significant, he said.
Massachusetts-based Thermo Fisher Scientific (NYSE: TMO) announced last week that it would purchase PPD, a global contract research organization with a presence in Wilmington that dates back about 35 years, for $17.4 billion.
Thermo Fisher officials have not yet said what they plan to do with PPD's space and employees in the Wilmington area. Thermo Fisher's leader in a call last week, however, did say that the company would welcome the PPD team and “all its colleagues.”
PPD officials have not responded to emails as of Monday afternoon regarding plans for the company's presence in the area.
The transaction is expected to be completed by the end of this year but is subject to regulatory approvals, officials said. After the deal closes, PPD would become part of Thermo Fisher’s Laboratory Products and Services Segment.
Area officials on Monday noted the influence PPD has had on the region and the area's CRO cluster overall.
"It’s our fourth-largest employer (according to N.C. Commerce’s list) and largest private employer, so the employment and income impact is really large," said Jones, adding that he has no insider insite on the deal or company plans.
PPD's employment has reached about 1,800 local employees among its 26,000-person global workforce that is operating in nearly 50 countries, according to the latest figures from the company.
Having PPD's headquarters in Wilmington also sends signals to other companies that "we’re more than a small beach town; we're a legitimate location for business," Jones said.
"While Live Oak and nCino now help send that signal as well, it’s not as visible a signal as the property and logo on the riverfront," Jones said.
The 12-story headquarters building stands along the riverfront in downtown Wilmington at 929 N. Front St. The company is also among New Hanover County’s top 10 taxpayers
Jonathan Barfield Jr., a New Hanover County commissioner, said that PPD, over its long history in the county, has "had a phenomenal effect on the economy."
It shows how much the company has been "a valuable asset they are not just to this region, but to the entire world of pharmaceutical research," he said.
"To get $17 billion shows a strength of the vision that Fred Eschelman (founder of PPD) had way back when ... to bring this company to Wilmington to see it grow," Barfield said.
"So, hopefully, they will stay local. Hopefully, they won't change the footprint from Wilmington and will bring more jobs to this region. That's my hope and desire," he added. "I think that we have built enough of a cluster of individuals that work in that arena to where there's a decent talent pool here for companies to reach out to. I know they still do a lot of recruiting from other places, but we have definitely created a strong cluster."
PPD, has not only had a strong presence through its operations in Wilmington but also through "their presence as the foundation of a CRO cluster," Jones said.
"With PPD, many other research firms may not be located here and much of the talent from UNCW would leave the region in search of employment," Jones said. "PPD strongly contributes to economic development objectives of attraction and retention of both quality employers (not just PPD but also the other CROs) and talented individuals."
Natalie English, president and CEO of the Wilmington Chamber of Commerce, also noted PPD's impact on the region as a large employers and influencer on creating the area's CRO hub with "more than 30 other CROs in our region."
PPD has also made significant investments in the Wilmington area's ability to "develop a qualified workforce through UNC-Wilmington," she said.
"Their workforce has increased the volume of business travelers moving through ILM, leading to more investments in that infrastructure that benefits everyone in our community. We also know PPD has been a good corporate citizen and contributes significantly to our nonprofit community. Employees that live locally invest in our community by purchasing homes, visiting restaurants and spending money on other entertainment options. They're also valuable community volunteers in various nonprofits in our community," English said. "These individuals and their family members add to the unique character of our community in many positive ways."