The number of shares to be offered and the price range has not yet been determined, according to the Form S-1 PRA filed by Raleigh, North Carolina-based PRA with the US Securities and Exchange Commission.
PRA intends to use the proceeds from the IPO to reduce the company’s debt by redeeming a portion of Senior Notes and to repay a portion of borrowings under credit facilities. The company notes in its filing that as of June 30, the aggregate principal amount of the Senior Notes outstanding was $375m, excluding accrued and unpaid interest of $8.9m.
This is the second time PRA has evaluated its options regarding going public since last May. The previous push to go public may have just been a way to attract private equity investment, experts told us, as the company later sold to KKR after merging with CRO RPS for $289.3m.
IPO Details
And unlike the previous confidential S-1 filing last May, this latest S-1 filing reveals more of the financial picture around PRA and the CRO industry in general.
The company notes some serious recent growth as new business awards for the six months ended June 30, 2014 were $846.6m, whereas for the same period in 2013, the company saw $492m in new business.
Backlog, which is the anticipated service revenue from contracted new business awards, has grown steadily over the past two years to $2bn as of June 30, 2014, and PRA says it expects to generate $0.6bn of service revenue during the remainder of 2014. By comparison, Quintiles, the world’s largest CRO, saw its backlog eclipse $10bn recently while Parexel’s backlog is hovering around $5bn.
PRA also boasts of a clinical development platform that includes more than 75 offices across North America, Europe, Asia, Latin America, South Africa, Australia and the Middle East and more than 10,000 employees worldwide.
Since 2000, the company has performed approximately 2,300 clinical trials worldwide, more than 100 marketed drugs across several therapeutic areas and conducted the pivotal or supportive trials that led to FDA, or international regulatory approval, of more than 45 drugs.
As far as the overall market moving forward, PRA notes that market research company ISR estimates in a recent report that approximately 31% of Phase I through IV of clinical development spend is outsourced to CROs, and the levels of penetration are expected to increase to approximately 43% by 2018. Covance CEO Joe Herring similarly predicted a rise in outsourcing penetration though he seemed to think it could rise to 70%
Jefferies LLC, Citigroup Global Markets Inc., KKR Capital Markets LLC, UBS Securities LLC, Credit Suisse Securities (USA) LLC, and Wells Fargo Securities, LLC are serving as joint underwriters for the offering.
PRA intends to list its common stock on the Nasdaq under the symbol PRAH.