First, you said, "PPD actually has more employees (>10000 to 8800), but about 400M less in revenue." I disagree with that...PPDI last reported employees is 10,400 and CVD's is "more than 10,000." So, they are basically the same and therefore I continue to believe there could be scale benefits to PPDI making the acquisition. Further, PRXL has about 9,300 employees, so the scale advantage over CVD would be material even if your numbers were correct, which they are not.

Second, on your assertion of "lack of focus," I would expect Fred to claim that there are salient facts to consider in comparing PPD's $152K in revenue per employee with CVD's $200K. I think it is interesting that PPD got $33K in EBITDA per employee for each $152K per employee in revenue, compared with CVD's $37K in EBITDA on each $200K...a 3% better EBITDA margin at PPD. So, given the superior margin at PPD, I think it is difficult to argue that PPD lacks focus. And the margin would be even higher with greater scale! (PRXL, by the way, gets only $17K of EBITDA per employee on $144K of revenue; just think of the incremental profitability to PPD if that 11.8% margin could be brought up to PPD's 21.7%!)I do agree with you, though, that discover should be spun off.

I don't think PRXL has to be a leader or have differentiating advantages for the deal to make sense. Sometimes, so-called "bolt on" deals can make a lot of sense, particularly with the margin of safety available in this deal.

Finally, I disagree with your logic with respect to adding to the bottom line "short-term." There would be nothing short-term or one-off occurring in such a combination...the incremental profitability would be permanent and ongoing.