Kohlberg Kravis Roberts agreed on Monday to buy PRA International, a provider of clinical laboratory testing services for drug makers, from another private equity firm, Genstar Capital.
Terms weren’t disclosed, but a person briefed on the matter said that the purchase price was about $1.3 billion.
Monday’s deal caps an auction of PRA, which Genstar bought for the second time in 2007, for about $790 million. The company is one of the biggest lab services contractors in the world, having run about 2,000 clinical trials in more than 80 countries since 2000.
Companies like PRA could prove attractive to private equity firms as phrmaceutical companies continue to rush to fill their drug lineups with new products, generating a steady demand for clinical testing. K.K.R. has looked at making an investment in the industry for over a decade, though Monday’s deal is its first.
“As one of the fastest growing companies in the CRO sector, PRA is known for its strong client relationships and differentiated therapeutic expertise,†Jim Momtazee, the head of K.K.R.’s health care investing team, said in a statement, referring to contract research organizations. †PRA management and K.K.R. share the common ambition of building on this platform by continually improving service offerings to clients and providing compelling career opportunities for employees.â€
The deal is expected to close in the third quarter, pending regulatory approval.
K.K.R. has secured financing from Credit Suisse, Jefferies, UBS and its own capital markets arm. The investment firm was advised by Credit Suisse, UBS, Wells Fargo and the law firm Simpson Thacher & Bartlett.
PRA was advised by Jefferies and Latham & Watkins.
