Thermo Fisher Scientific has agreed to acquire PPD, a provider of clinical research services to the pharma and biotech industry, for $17.4bn in cash, in addition to the assumption of around $3.5bn net debt.

PPD is engaged in providing a wide range of clinical research and laboratory services to help its customers in increasing drug development productivity.

The company has more than 26,000 employees, operating in nearly 50 countries, and has generated revenue of $4.7bn in 2020.

Thermo Fisher Scientific chairman, president and CEO Marc Casper said: “The acquisition of PPD is a natural extension for Thermo Fisher and will enable us to provide these customers with important clinical research services and partner with them in new and exciting ways as they move a scientific idea to an approved medicine quickly, reliably and cost effectively.

“Longer term, we plan to continue to invest in and connect the capabilities across the combined company to further help our customers accelerate innovation and drive productivity, while driving further value for our shareholders.”

Thermo Fisher said that the acquisition would strengthen its position as a global leader in the attractive, high-growth clinical research services industry.

Also, the business combination would add highly complementary services that further enhance the company’s value proposition for pharma and biotech customers.

Upon closing of the acquisition, PPD is expected to operate as a unit of Thermo Fisher’s Laboratory Products and Services Segment.

With extensive capabilities and knowledge in the pharma and biotech industry, the combined company would enable new solutions for customers.

The transaction is expected to be closed by the end of 2021, subject to certain customary closing conditions, including the receipt of applicable regulatory approvals.

PPD chairman and CEO David Simmons said: “This is a very exciting announcement for our shareholders and will provide customers with an even better opportunity to bring meaningful innovation to the market faster and more efficiently.

“Thermo Fisher is a world-class company with a very similar culture and values and will provide a great foundation for our colleagues to continue to deliver for our customers and to develop their own skills and careers.”

In March last year, Thermo Fisher agreed to acquire life science and molecular diagnostic solutions provider Qiagen for approximately $11.5bn.