Long-hold pays off: H&F, Carlyle make a killing with PPD

As the pharma services giant has added 12,000 jobs over the past decade, H&F and Carlyle are set to produce 5.5x and 3x-plus multiples of investment, respectively, sources tell PE Hub.

As Thermo Fisher swallows PPD at a nearly $21 billion enterprise value, the latter’s decade-long investors – Hellman & Friedman and Carlyle Group – are walking away with billions of dollars as the company helping develop new life-saving drugs has also benefitted from massive value creation. 

H&F is set to produce a 5.5x blended multiple of its full investment of $1.7 billion, generating a nearly $8 billion profit; Carlyle will score a more than 3x return, having invested $2 billion combined, sources with knowledge of the transaction told PE Hub. Both firms invested in two tranches – first in 2011 through PPD’s take-private, and again through the company’s 2017 recapitalization.

H&F declined to comment and Carlyle did not return requests for comment.

PPD’s value grew immensely under the two firms, with its equity value having increased 11x over the past decade, one of the people said.

Since 2011, when the pair of PE firms took the contract research organization private through a $3.6 billion LBO, PPD’s enterprise value is up almost 6x to $20.9 billion amid its sale to Thermo.

Joining the public markets just before the pandemic hit, that’s up 50 percent since its February 2020 IPO, which implied an initial $14 billion value. When H&F and Carlyle recapped the company in April 2017 – adding Abu Dhabi Investment Authority and a GIC affiliate as investors – it brought PPD’s valuation to $9.05 billion, marking an about $5.5 billion gain over the first six years of investment.

Pressing the reset button has paid off for H&F and Carlyle, having chosen to re-invest in 2017 despite having already achieved a strong outcome. While there was a sale process at that time, H&F as an existing shareholder was the highest bidder and therefore ended up investing more, one source said. 

Carlyle in 2011 invested $1 billion via Carlyle Partners V to own around 58 percent in PPD, selling that stake entirely in 2017. The firm then re-invested another $1 billion in 2017 through a Carlyle Partners VI to own 24 percent of PPD, sources said, while H&F increased its stake to 57 percent, becoming the largest investor as GIC and ADIA joined the investor base. 

H&F, for its part, injected a combined $1.7 billion of equity into PPD in two allotments – initially in 2011 via Fund VII, and again in 2017 through Fund VIII, one of the sources said.  

In August 2015, the company completed a dividend recapitalization, which the Wall Street Journal previously said would finance around $400 million in dividend distribution to shareholders.

Ahead of PPD’s sale, H&F and Carlyle’s ownership stakes most recently stood at 38 percent and 16 percent, respectively.

While Carlyle and H&F opted to reinvest through a cross-fund strategy in this case, the long-term mindset aligns with a broader trend of GPs increasingly looking to extend holds of prized assets through a variety of strategies.

The so-called long-hold is an established playbook for H&F, known for having a concentrated portfolio. For example, H&F in March sold a minority investment in Edelman Financial Engines to Warburg Pincus, valuing the company at $7.3 billion. The firm chose to remain majority investor even as its initial 2015 investment stood at a little over 4x its money, PE Hub wrote. Its Kronos investment, meanwhile, dates to 2007.

Carlyle, for its part, recently sold little a more than 50 percent economic ownership in MedRisk, which manages the physical therapy claims process and coordinates care for injured workers, to CVC Capital Partners. Three years into its investment, Carlyle has produced a close to 3x MOIC including the equity rolled over, will stay on to support continued growth, PE Hub wrote. 


Private equity is often given a bad rep in mainstream media, but PPD arguably negates that narrative.

Under its 10 years of backing, PPD saw a massive value-creation – not because it was ripped apart through financial engineering and quickly flipped – but because the company has simply performed well and grown steadily. The company employed approximately 23,000 people across 46 countries at the time of its IPO, up from some 11,000 a decade earlier. 

In the business of helping bring new, innovative drugs to market more effectively, PPD has also had a real-world impact. For instance, PPD has created the world’s largest vaccine site network, and notably, acted as Moderna’s CRO partner through which it ultimately assisted in the development a successful vaccine against covid-19.

Value creation initiatives have included revamping PPD’s commercial organization and sales approach, helping to more than double its annual net new business awards since 2011; investments in innovative, next-gen clinical trial platforms to drive more efficient trials; accelerated enrollment and virtual trials, as well as increased patient access among other things. 

Leadership capabilities also proved a valuable growth driver at PPD. Shortly after the H&F-Carlyle take-private, David Simmons – who was in the succession race to be CEO of Pfizer at the time, one source previously said – chose to join PPD, a significantly smaller company at the time.