By Carl O'Donnell, Olivia Oran & Greg Roumeliotis
(Reuters) – Contract research organisation Pharmaceutical Product Development LLC (PPD) is exploring a sale or initial public offering that could value it at between $7 billion & $8 billion (Â£4.6 billion & Â£5.2 billion), including debt, people familiar with the matter said.
A deal would underscore how the contract research organisation industry has benefited in recent years from the pharmaceutical companiesâ€™ drive to cut costs, reduce clinical trial times & expand their research & development presence around the world.
PPD's private equity owners, Carlyle Group LP & Hellman & Friedman LLC, have reached out to investment banks approximately appointing financial advisers to PPD, the people said on Friday.
PPD will run an auction to sell itself early next year, yet will pursue an initial public offering instead if the acquisition offers it receives do not meet its owners' valuation expectations, the people added.
The sources asked not to be identified because the deliberations are confidential. Carlyle & Hellman & Friedman declined to comment, while PPD did not respond immediately to a request for comment.
A sale or IPO of PPD would come as dealmaking activity in the contract research organisation sector is picking up steam. Earlier this year, Laboratory Corporation of America Holdings acquired Covance for $6.1 billion, while WuXi PharmaTech was taken private for $3.3 billion.
Based in Wilmington, North Carolina, PPD offers its services to biotech, pharmaceutical & medical device companies that wish to outsource research services. It focuses its research on a wide range of therapeutic areas, ranging from cardiovascular to urology.
Carlyle & Hellman & Friedman took the company private in 2011 for $3.9 billion.
(Reporting by Carl O'Donnell & Olivia Oran, additional reporting by Greg Roumeliotis; Editing by Andrew Hay)