WALTHAM, Mass. (AP) – Thermo Fisher is buying clinical research company PPD in a deal valued at $17.4 billion.

Activity in healthcare testing has surged during the global pandemic, and Thermo Fisher expanded its exposure to that sector rapidly with the deal announced Thursday.

Shares of the Waltham, Massachusetts, company rose almost 4% before the opening bell.

PPD, based in Wilmington, N.C., is a contract-research company, which tests experimental drugs being pursued by pharmaceutical companies. The company provides services to emerging biotech firms as well as global pharmaceutical companies. It booked revenue of $4.7 billion last year.

Thermo Fisher makes scientific research and testing equipment, It said this week that U.S. regulators granted emergency use authorization for a new automated system for processing COVID-19 tests.

Thermo Fisher Scientific Inc. will pay $47.50 per PPD share. The transaction also includes approximately $3.5 billion in debt.

PPD will be folded into Thermo Fisher’s laboratory products and services unit.

Shares of PPD, based in Wilmington, North Carolina, rose nearly 7% before the market opened.