PRA raises the stakes, eyeing $400M in a blockbuster IPO

CRO conglomerate PRA is angling to be the next contract drug developer to make a splash on Wall Street, setting terms for a $400 million IPO.

The North Carolina company intends to offer more than 18 million shares at a price between $20 and $23, looking to debut on the Nasdaq as "PRAH." The CRO plans to make an additional 3 million shares available to its underwriters to cover overallotments, setting its maximum deal value at $492 million. PRA is planning to put all of its proceeds toward paying down debts and covering senior notes.

With its offering, PRA joins a growing list of sizable CROs taking to the public markets for some financial flexibility. Rival INC Research is looking to execute a $150 million debut this month, following a $1 billion IPO for Catalent ($CTLT) in August and Quintiles' ($Q) $947 million offering in 2013.

Today's PRA has been assembled piecemeal over the past year and change with the help of private equity heavyweight KKR, which paid $1.3 billion for the company last summer. A month after closing that deal, KKR signed up 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.

Last year, the CRO pulled in pro forma revenue of $1.2 billion, and the company, still integrating its recent acquisitions, expects to further expand in the coming years.

- read the filing