This follows the June 24 announcement that KKR had acquired CRO PRA International (PRA) for $1.3 billion. Terms of the RPS transaction were not disclosed.
Upon the close of both transactions, PRA and RPS will merge, with PRA chief executive officer Colin Shannon to lead the combined enterprise. RPS will continue to operate independently as the newly formed Strategic Solutions Division of PRA under the continued leadership of RPS president Harris Koffer and executive vice president Samir Shah.
As part of the transaction, RPS chief executive officer Dan Perlman is leaving RPS to pursue other interests outside the CRO industry.
RPS is a provider of outsourced clinical development services and is known for pioneering the embedded model of functional clinical development outsourcing. Founded in 1998, RPS is one of the fastest growing CROs with more than 4,000 employees located in over 64 countries.
Koffer, president of RPS, said, “This transaction represents the next step in the evolution of RPS and its embedded service model. I can think of no better partner for RPS than PRA and am excited about the opportunities going forward for the clients and employees of RPS.”
“RPS will continue to focus on providing its unique embedded model, as well as new innovative strategic solutions,” said Shah of RPS. “As a division of PRA, we will continue to operate exactly as we do today, which should enable a seamless integration with absolutely no disruption for our clients and business as usual for our employees.”
PRA CEO Shannon said, “We are excited about the potential to deliver even greater value to our clients through this combination. By bringing together PRA and RPS, we will be able to offer a more comprehensive range of services across all segments of the biopharmaceutical industry through our expanded capabilities, therapeutic expertise, and greater geographic presence.”
“This merger brings together two highly complementary companies, with PRA as a leader in traditional programmatic outsourced clinical development and RPS as a pioneer of the innovative embedded clinical development model,” said Jim Momtazee, head of KKR’s health care investing team. “Together, they will become an even stronger organization with significant opportunities for continued growth and innovation with a focus on providing high-quality service to clients and attractive career opportunities for employees.”
The transaction, subject to regulatory approvals and other customary closing conditions, is expected to close in the third quarter of 2013.
Citigroup acted as exclusive financial advisor and Kirkland & Ellis acted as legal advisor to RPS. Credit Suisse, Jefferies and UBS Investment Bank served as financial advisors to KKR. Simpson Thacher & Bartlett served as legal counsel to KKR. Fully committed debt financing will be provided by Credit Suisse, Jefferies, UBS Investment Bank, Citigroup and KKR Capital Markets.
Founded in 1998, RPS is a global provider of outsourcing clinical development solutions, providing comprehensive phase I-IV services. PRA, headquartered in Raleigh, N.C., is an international CRO with over 5,300 employees offering services in more than 80 countries.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a global investment firm with $83.5 billion in assets under management as of June 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform.