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KKR, Warburg, Cinven Eye Bids For PRA

Target: PRA International

Price: As much as $1.3 billion

Multiple: As much as 10x

Sponsors: Kohlberg Kravis Roberts & Co, Warburg Pincus LLC, Cinven Ltd

Seller: Genstar Capital LLC

Financial Adviser: Jefferies Group LLC

The buyout firms are among the parties preparing to submit second-round bids later in June for Raleigh, North Carolina-based PRA, the sources said, asking not to be identified because the auction is not public.

Private equity firm Genstar Capital LLC, which acquired PRA in 2007 for $797 million, put the company on the auction block earlier this year, two years after its earlier effort to sell PRA failed over price, the sources said. Genstar is also considering an initial public offering for PRA and could pursue that route should private equity bidders fail to meet its price expectations, the people said. PRA could be valued at as much as $1.3 billion based on annual EBITDA of around $130 million, they added.

Genstar is working with Jefferies Group LLC to find a buyer for PRA, the people said. Genstar declined to comment, while PRA and Jefferies did not respond to requests for comment. Cinven declined to comment, and KKR and Warburg Pincus did not respond to requests for comment.

PRA, which provides clinical trial services and other research for pharmaceutical companies in more than 80 countries to help them win regulatory approval for drugs, was founded in 1976. Genstar worked with Credit Suisse Group AG in 2011 in an attempt to sell PRA amid a wave of private equity deals in the contract research space, but could not find a buyer that would meet its price expectations, people familiar with the matter said at the time.

The market is now more generous toward such companies. Last month, Bain Capital LLC and TPG Capital LP raised $947 million by taking Quintiles Transnational Holdings, the world’s largest provider of contract research services, public.

Other private equity deals in this space include the $3.9 billion acquisition of Pharmaceutical Product Development Inc by The Carlyle Group LP and Hellman & Friedman LLC in 2011, and the $1.1 billion takeover of inVentiv Health Inc by an investor group led by Thomas H. Lee Partners LP, also in 2011.

Soyoung Kim and Greg Roumeliotis are correspondents for Reuters in New York.