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KKR, Warburg, Cinven eye bids for clinical trial firm PRA - sources

By Soyoung Kim and Greg Roumeliotis

NEW YORK (Reuters) - Private equity firms KKR & Co LP, Warburg Pincus LLC and Cinven Ltd are weighing bids for PRA International, a clinical research group, which is for sale and could fetch as much as $1.3 billion, several people familiar with the matter said.

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 this week, 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 earnings before interest, tax, depreciation and amortization 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 over 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 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.

(Reporting by Soyoung Kim and Greg Roumeliotis in New York; additional reporting by Jessica Toonkel; Editing by Leslie Adler)

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