Rumors of PRA heading back to Wall Street were greatly exaggerated, it turns out, as private equity giant KKR has agreed to snatch up the global CRO for $1.3 billion.
Genstar Capital, PRA's current owner, was reportedly fielding offers from Warburg Pincus and Cinven, among other private equity firms, before KKR won out. Genstar bought PRA for $797 million in 2007 and tried to flip it in 2011 but nixed that process when bids came in low.
Last month, PRA filed a confidential draft registration for an IPO, but, thanks to the recently passed Jumpstart Our Business Startups Act, the CRO didn't have to disclose its financials as it tested the waters for a public re-emergence. Now, with KKR on the dotted line to take PRA off Genstar's hands, that move may well have been a gambit to inject some immediacy into the bidding process.
In life under Genstar, PRA has expanded to employ about 5,000 people in more than 30 countries, growing its presence abroad over the past year with a buyout of Eastern European CRO ClinStar and the launch of a joint venture in China with local heavyweight WuXi PharmaTech ($WX). Colin Shannon, PRA's CEO, said the company believes it's poised for even further expansion under KKR's stewardship.
"This transaction marks the next stage of our evolution," Shannon said in a statement. "With KKR as our new partner, we look forward to working with them to accelerate our innovation and growth while continuing to make a difference not only for our clients but also for our people."
The high-dollar deal follows a wave of dealmaking in the CRO world, and Genstar's move to flip PRA for cash stands in contrast the likes of Bain Capital and TPG Capital, former owners of Quintiles ($Q), who took the public exit and raised about $947 million for the company and themselves in a May IPO.
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