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PRA’s largest shareholder is reducing its stake

PRA Health Sciences’ largest shareholder, giant private equity firm Kohlberg Kravis Roberts, will own less than 50 percent of the pharmaceutical services company following an upcoming secondary stock offering.

Raleigh-based PRA announced the sale of 5 million shares, which is expected to close Friday, earlier this week.

KKR owns 4.9 million of the shares being sold. That sale will reduce its stake in the company from 58 percent to 49.8 percent, according to PRA’s prospectus.

As a result, PRA will no longer be classified as a “controlled company” under Nasdaq rules. That means PRA will no longer be exempt from certain corporate governance requirements designed to protect shareholders, such as having a majority of the company’s board of directors be so-called independent directors.

However, the prospectus advises, KKR still will “have the ability to exercise significant control over all corporate actions requiring stockholder approval,” including the election of directors.

None of the proceeds from the offering will go to PRA.

In addition to KKR, the company’s chief financial officer, Linda Baddour, is selling 92,308 shares. She will own 372,286 shares after sale is completed.

PRA shares closed Wednesday at $44.12, down 52 cents. Shares are down 2.5 percent this year.

David Ranii: 919-829-4877, @dranii

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