Laboratory Corporation of America Holdings (LH) is looking to acquire contract research firm Pharmaceutical Product Development LLC (PPD), reports Reuters.

The deal could value privately-held PPD at more than $8 billion, including debt, according to sources who did not wish to be identified as the discussions continue to remain under the wraps.

Consolidation in Laboratory Testing Services

The Burlington, North Carolina-based Laboratory Corp is one of the biggest clinical laboratory companies in America, and its primary business centers around routine tests, patient diagnosis, and in the monitoring and treatment of the disease. The company, which has a $14.3 billion market cap, also has specialist testing services which cover cancer related testing, HIV genotyping and phenotyping, genetics diagnosis, and clinical trials.

If finalized, the acquisition of PPD will be the largest one for Laboratory Corp. The deal will build on LabCorp's $5.7 billion acquisition of contract research organization Covance Inc. in 2016. With the PPD deal, LabCorp expects to bring laboratory testing services into one single corporate fold. (For more, see LabCorp's Challenges Ahead.)

Last year saw a similar $10 billion merger of IMS Holdings, a medical data provider, with Quintiles, a leading contract researcher, which created Quintiles IMS Holdings Inc. (Q).

PPD is on the Block

Pharmaceutical Product Development is based in Wilmington, North Carolina, and offers outsourcing research services to companies operating in the biotech, pharmaceutical and medical devices sector. Its diversified research services span from cardiovascular and urology therapeutic areas.

It is currently owned by private equity players, which include the Carlyle Group LP and Hellman & Friedman LLC, and has generated buying interest from many buyout firms. Pharmaceutical Product Development was listed on Nasdaq stock exchange in 1996, and was taken private in 2011 by Carlyle and Hellman & Friedman for $3.9 billion valuation.

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