PRA International, Inc.
2007 Investment
Fund: Genstar V
Opportunity
Genstar believes that PRA is a compelling investment opportunity in an industry and company that Genstar knows well. The CRO industry dynamics continue to be quite favorable, with significant industry growth projected over the next five years. With the new management team in place led by Terry Bieker, PRA is one of the strongest CRO platform companies with global capabilities. A private company context should help PRA complete a successful turnaround.
Strategy
Genstar believes PRA has an outstanding management team, a strong business model and intends to invest in the strategic initiatives necessary to allow the company to capitalize on the favorable dynamics of the CRO industry. By making the right investments and empowering employees to succeed, Genstar fully expects to accelerate PRA’s current growth and improve operating margins.
2001 Investment
Fund: Genstar III
IPO: November 18, 2004
Secondary Offering: June 20, 2005
Opportunity
Genstar’s investment in PRA International, a leading global contract research organization (CRO) focused on outsourced phase I-IV clinical drug development services for many of the largest pharmaceutical and biotech organizations, was borne out of Genstar’s focus on the life sciences industry. Genstar and management acquired PRA in June 2001.
Genstar was first attracted to PRA because of the company’s prominent position in the rapidly expanding area of outsourced drug discovery and development services. Major pharmaceutical and biotechnology companies are increasingly outsourcing non-core elements of the costly and complex drug discovery, development, and approval processes as they focus their resources on investigating the abundant opportunities for new drugs and treatments brought about largely by recent advances in genomics and proteomics.
Strategy
Genstar saw an opportunity to further increase the value of PRA’s franchise by improving EBITDA margins and assisting the company in acquiring other businesses along the clinical research continuum. Genstar and management set a strategic plan focused on i) increasing utilization of PRA’s Trial Management Centers, particularly the newer facilities in Europe, thereby significantly increasing EBITDA and ii) better positioning the company to compete for large, worldwide projects by developing and acquiring capabilities such as an expanded global presence and additional therapeutic specialties, additional phase I capabilities and post-marketing phase services.
Result
Genstar aided PRA in the sourcing, execution and integration of eight add-on acquisitions, vastly increasing PRA’s global footprint and international capabilities. By the time of Genstar III’s exit in December 2007, PRA had grown from $115 million in revenue to over $300 million, while EBITDA increased from $14 million to $46 million over the same period.
In 2004 and 2005, PRA completed initial public & secondary offering of common stock, in which Genstar III sold a significant portion of its holdings. In 2007, Genstar III fully divested its remaining interest in PRA when the company was taken private by Genstar V and affiliates.