WALTHAM, Mass. – Thermo Fisher is buying the clinical testing company PPD for $17.4 billion with the global pandemic creating a surge in demand.
Activity in healthcare testing has gone into overdrive over the past year and Thermo Fisher accelerated its entry into that field with the deal announced Thursday.
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Shares of the Waltham, Massachusetts, company rose almost 2% at the opening bell.
PPD, based in Wilmington, N.C., is a contract-research company, which tests experimental drugs being pursued by pharmaceutical companies. The company provides services to emerging biotech firms as well as global pharmaceutical companies. It booked revenue of $4.7 billion last year.
Thermo Fisher makes scientific research and testing equipment and has been engaged in efforts to quell the pandemic. It has processed COVID-19 tests and supplied the scientists developing treatments and vaccines. It also created a molecular diagnostic business to support COVID-19 testing.
Revenue climbed to $6.63 billion from company divisions last year that dealt in products tied to COVID-19 diagnosis and treatment.
It said this week that U.S. regulators granted emergency use authorization for a new automated system for processing COVID-19 tests.
Booming sales in goods and services related to the pandemic has provided Thermo Fisher with a buffer against other parts of its business that suffered as businesses shut down and people sheltered.
Thermo Fisher Scientific Inc. will pay $47.50 per PPD share. The transaction also includes approximately $3.5 billion in debt.
PPD will be folded into Thermo Fisher’s laboratory products and services unit.
Shares of PPD, based in Wilmington, North Carolina, rose nearly 7% Thursday.
The deal is expected to close by the end of the year.