PRA Health Sciences, which went public last week, announced that its underwriters have exercised their option to purchase an additional 2.5 million shares at the initial public offering price.
That boosted the Raleigh-based company’s net proceeds from its IPO to $333 million, after deducting fees and expenses. PRA is using that money to pay down its debt.
PRA went public last week by selling 17 million shares at $18 each, below the target price of between $20 and $23 the company had reported in its securities filings. The stock closed Wednesday at $20.39, up 4 cents.
PRA also disclosed in a new securities filing that giant private equity firm Kohlberg Kravis Roberts has agreed to accept a lower “termination fee” in conjunction with halting the fees it has been collecting for advisory and consulting services.
KKR, which still owns a controlling stake in PRA, will receive a $11.9 million termination fee rather than the $22.7 million fee it was entitled to under its agreement. Last year PRA paid KKR $2 million for advisory and consulting services.
Such termination fees are fairly typical when a company controlled by private equity firms goes public, but it’s a practice that has attracted critics.
PRA is a contract research organization, or CRO, that helps pharmaceutical and biotechnology companies test experimental drugs and analyze the results.