PRA swings for $375M in the next big CRO IPO

PRA is planning to cap months of dealmaking with a Wall Street splash, filing to go public and bank $375 million in the process.

The North Carolina CRO plans to land on the Nasdaq under "PRAH," earmarking its IPO proceeds to pay down debts and redeem senior notes. The company's filing doesn't delve into how many shares it intends to offer or at what price it plans to do so, and the $375 million placeholder value could well increase before PRA makes it to market.

PRA is riding a wave of investor interest in companies that handle the clinical and logistical legwork for drugmakers, following last month's roughly $1 billion debut for Catalent ($CTLT) and Quintiles' ($Q) $947 million IPO in 2013.

The company has gradually taken shape over the past year and change after private equity heavyweight KKR paid $1.3 billion for it last summer. A month later, KKR signed a deal to pay an undisclosed sum for ReSearch Pharmaceutical Services and merge its two acquisitions. By year's end, the company had acquired CRI Lifetree to bolster its CRO conglomerate's early-stage know-how, completing a buy-and-merge plan that created what it said is the world's fourth-largest pharma contractor.

Now PRA is settling in to a new identity, touting itself as the ideal partner for the industry's many players who fall outside the Big Pharma bubble. In the first 6 months of 2014, the company got 20% of its revenue from small- to midsized pharma companies, 26% from Big Biotech and 14% from emerging drug developers, PRA said.

Meanwhile, the CRO industry is on pace to grow about 8% a year, according to Industry Standard Research, reaching $32 billion by 2018. ISR estimates that about 31% of all clinical development spending is outsourced to CROs, a number the firm expects to reach 43% in the next 5 years.

- read the filing