Kohlberg Kravis Roberts & Co. L.P.
) announced an agreement to purchase clinical research firm
ReSearch Pharmaceutical Services Inc (RPS) from N.Y.-based global
private equity firm, Warburg Pincus. This agreement marks
Kohlberg Kravis Roberts' second investment in a contract research
organization (CRO), within 2 months of its agreement to buy PRA
International from California-based Genstar Capital LLC in
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The transaction is expected to be completed in the third quarter
of this year.
Credit Suisse Group AG
) are acting as advisors for the deal.
Founded in 1998, ReSearch Pharmaceutical Services, which operates
in over 64 countries, is a leader in outsourced clinical
development services. The company is primarily known for its
notable contribution in the Embedded model of functional clinical
On completion of both the deals, Kohlberg Kravis Roberts plans to
merge PRA International and ReSearch Pharmaceutical Services. PRA
International's Chief Executive Officer Colin Shannon is expected
to head the combined entity. ReSearch Pharmaceutical Services
will operate as the Strategic Solutions Unit of PRA
For Kohlberg Kravis Roberts, the latest deal will mark its third
healthcare investment in a little over the past one year. In Jun
2012, the company announced an investment in GenesisCare, an
Australia-wide network of cancer and cardiovascular care centers.
Since 1995, Kohlberg Kravis Roberts has invested about $9 billion
in healthcare globally.
In the recent past, the pharmaceutical industry has witnessed
many mergers, with 17 moderate to large deals taking place over
the last 4 years. Clinical research service firms are either
being acquired by private equity firms or are becoming public,
with healthy investor demand. The CRO market is expected to be
more profitable, given the rising number of pharmaceutical
companies that are outsourcing the research necessary to enable
drugs to meet regulatory standards.
Kohlberg Kravis Roberts currently carries a Zacks Rank #3